The European thermoplastics market had its best year of this decade in 2006, with demand growing by more than 3% to reach nearly 40 million tonnes, says UK research group AMI.
In its annual European plastics industry report, AMI attributed the stronger market to solid GDP growth in the Euro area in 2006. In particular, Germany’s revival last year was driven by export growth and strong investment.
The German plastics industry has benefited from demand in Central Europe, where local processing capacity has not kept pace with growth in demand for packaging and other goods. AMI acknowledges that production of low cost or labour intensive plastics goods has been transferring to Central and East European countries, but more highly skilled goods are still being sourced from processors in the West. It highlights Germany’s advantages due to technical expertise and its close proximity.
In contrast, overall thermoplastics demand in France and the UK was largely unchanged in 2006. AMI blames this on the continuing relocation of injection moulding capacity to Central and Eastern Europe and Asia, with the electrical goods and appliances sector the worst hit. Last year was also bad for the UK and French automotive industries, another important end sector for plastics, with car production falling substantially from 2005 levels.
Central and Eastern European polymer demand grew by nearly 9% in 2006 compared with just under 3% for Western Europe. AMI points out, though, that total market demand of around 4.6 million tpa means the region accounts for less than 12% of total European demand. The biggest country, Poland, has a 4.9% share of the total European market.
In its analysis, AMI also considers end markets, and packaging was chief among these as a driver for commodity plastics demand in 2006. Demand hot spots last year were flexible films for food, injection moulded PP for thin wall packaging and HDPE for closures, with PET also continuing its growth in bottle and sheet applications.
The group also notes the support given to PVC by rising demand for building products, including window frames. The PVC market enjoyed its best year in a decade with demand up over 3% in 2006.
Styrenics presented a mixed picture last year. Growth in demand for insulation foam in building applications helped drive “exceptionally strong” growth seen in EPS consumption in 2006, says AMI. But the general-purpose high impact polystyrene market showed no overall growth, suffering from higher prices relative to PP and PET which has led to its substitution in packaging markets.
The engineering thermoplastics market grew 5% in 2006, according to AMI, benefiting from investments in automotive and consumer electronic products, particularly flat screen TVs, in Eastern and Central Europe. It says there was a notable recovery in ABS/SAN demand in 2006.
