Polymer demand falls for food packaging
AMI’s 2009 European Plastics Industry Report claims demand for thermoplastics rose in 2007 to 41,278t, but fell in 2008 to 37,949t, levels lower than the previous four years.
Declines in polyethylene terephthalate (PET) usage were smaller than for other polymers, but AMI claimed: “Even so the 3 percent decline recorded for 2008 is unprecedented for a material more used to growing at 6 percent per year. In addition to weak economic fundamentals, PET markets were affected by the cool summer and weakening consumer demand for bottled water in Western Europe.”
Zenith Market Intelligence director Gary Roethenbaugh said: “Broadly, it can be said that the bottled water world is split into two halves. The more mature markets of North America and Western Europe have witnessed a gradual deceleration over the past few years whereas most other countries are continuing to drive growth of the category and this is likely to remain the case in the near future.”
The biggest decline in usage of polymer-based plastics was in the automotive and building industries, but AMI added: “Food packaging markets saw some contraction as converters destocked…”. The slump in demand was most marked in Western Europe, the report added.
“The speed of change in the thermoplastics market and its impact on polymer demand has been bewildering, with an 8 per cent drop in demand for thermoplastics across Europe,” said AMI publications manager Regine Futter.
Impact of pricing
Chris Harrison, chairman of the UK-based Packaging Federation, said: “You can look at the pricing of polymer as a supply and demand issue. The cost of making polymer doesn’t change too much from year to year, but polymer prices for packaging depend on demand in the automotive and building sectors.”
Demand in both sectors had been hit dramatically by recessions and weakened economies across all European countries, said Harrison: “Undoubtedly you can hear people talking in terms of reductions in demand of 5, 10 or 15 percent.”
In addition, he said the price of polymer resin looked set to rise with oil prices and this could lead to packaging firms switching to alternative materials.
A spokesman for Flexible Packaging Europe, based in Dusseldorf, Germany, suggested a “crucial price hike in the middle of last year” had led to polymer prices “going up like hell”. This could well have driven packaging firms to seek other intelligent solutions, he said.
“We see demand for flexible packaging material being in total less predictable,” he added. “There have been more uncertainties about market development and a lot of ups and downs over the year.
Sustainable, recycled packaging
“There are strong requests to switch to sustainable packaging solutions and if you use more recycled material, you use less virgin material, so you need to look at what the demand is there.”
Harrison said: “More companies are developing ways to use post-consumer packaging waste and this will in due course impact on demand. At the moment this represents a very small percentage, although it is growing.”