Mel Ettenson’s Global Plastics News
IAPD is pleased to welcome Mel Ettenson as a guest columnist each month in the IAPD News offering unique content for IAPD members. The column below is only a sample of the Global Plastics News. If you are interested in learning more about the entire publication, visit www.globalplasticsletter.com.
THE GLOBAL ECONOMY:
Global GDP growth in 2012 is projected for about 3 percent overall, with Europe lagging and BRIC (Brazil, Russia, India and China) continuing their double-digit achievements. Many economic forecasts indicate a robust recovery from The Great Recession (2008-2010) in 2012 and into 2013 with a cyclical slowdown for 2014. Leading the way in the above BRIC economies will be coal, energy, technology, services and green movements, with political events of course affecting the outlook in country-specific cases. In Europe, which affects most economies, the recession will not be overcome with exports to Europe affected and sales dropping. Some U.S. companies report that as much as 40 percent of their sales are from Europe. The Euro Zone economy is expected to contract by half a percentage point in 2012.
ENERGY AND PRICING:
Expect metals prices to be volatile in the next few years as prices will fall over the next several months, led by copper and zinc. Nickel, a component of stainless steel, will rise in price this year, due to high demand by the automotive sector. Meanwhile, steel and aluminum will remain stable. All this analysis of metals is strategic for targeting metal replacement applications. Prices for most commodity polymers will continue to slide, while specialty resins will demand more for their intrinsic value. Oil prices stay high with an eye on political events while wind power and solar energy initiatives continue to be tempered by oil supply and other renewable energy sources.
Bayer Group and its MaterialScience unit plans a major expansion in China (EUR over 3.1 million) and India (Rs,4,600mio) with the majority of the investment in chemicals and plastics, especially PC, with a 500,000 ton capacity increase. Victrex new ST polymer replaces PTFE in an electrode insulator connector that Ensinger supplies. Decking from recycled PP penetrates the U.S market through Geolam Inc. of Canada. PET sheet from OCTAL continues to capture applications in the packaging market. Laird Plastics CEO, Mark Kramer is elected Chair of the National Association of Wholesaler-Distributors, which represents most of the industrial distribution industry, including plastics.
The pace of Mergers and Acquisitions in the Plastics Industry slowed as 2011 ended, but it is expected to resume and remain strong in 2012. As 2011 ended, the tally was 353 deals, down 10 percent - the second best year among the last seven. In sectors, sheet and thermoforming accounted for seven more deals in 2011 – a 35 percent increase. We expect to see a significant increase in 2012, as capital becomes more available and revenue streams flow briskly again, producing greater valuations for seller companies. The divestiture of Harvel by Detrex to Georg Fischer may be a harbinger of further activity in this sector of our industry in the coming year.
About Mel Ettenson
During his 40-plus years in the plastics business, Ettenson always wondered why there wasn't a single, concise, reliable source of information about our industry. THE GLOBAL PLASTICS LETTER is a quick, highly informative plastics newsletter - to the point and timely enough to act on. In just four pages it packs relevant news, information and insights, with a primary focus on sheet, rod, tube and film, plastic semi finished shapes, plastic basic shapes, semi-finished plastics, plastic sheet rod tube and film. The newsletter covers pricing trends, market moves, new and upcoming products and services in the plastics industry.