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 GLOBAL ECONOMY:
The Global economy seems to resemble more of a continuing recession, rather than a double dip one with sluggish growth holding back the expected recovery. Of course the European debt crisis adds to instability and an uncertain outlook for 2012. Greece and Italy remain a challenge for EU members in order to support the Euro. China and India, and to some degree Brazil, look stronger than ever with the U.S. continuing tepid and tentative with a GDP growth of 2.5% expected in 4Q 2011 and continuing into 2012.
Drilling for natural gas in deep shale is a controversial process, whose time has come. Although fraught with regulatory uncertainty, much more will be heard from this energy source abundant in the U.S. ethanol production will stabilize next year as demand levels off and yet exports from the U.S. will impact global plastic resins market pricing (lower) as petroleum demand is reduced.
Watch for stop-start car engine systems (shuts down car engine at stop light then fires up again) to reduce gas usage by 3-6% in city driving. This is another demand reducer to lower the cost of petroleum and thus our polymer pricing eventually.
Prices of commodity resins such as PE, PP, PS and PVC are lower and headed down. Engineering thermoplastics are inching up. This dichotomy reflects market conditions which continue to follow the supply-demand curve (in the case of commodity resins), while reflecting both raw material cost factors and end-use application dynamics. Metal replacement opportunities need to continue for industry growth to be sustained into next year and beyond.
Primex Plastics partners with Azuna to make specialty two-dimensional PP sheet to collect and refract light. Quadrant EPP posts higher prices for PEEK, PPO and PPS plate, rod and tube. SABIC announced solar shading panels of Lexan® sheet contributing to energy efficiency at Westminster College in London. Also debuts Ultem® PEI foam for aerospace applications requiring lower moisture absorption than PMI.
Is your company in a position to expand? Many in the industry are coming off a growth year.
Getting credit is becoming easier and 2012 will be the year to borrow, with record low interest rates, and more importantly, lenders who have bolstered their reserves and want to diversify by spreading risks. Small banks in particular are now being proactive and by mid-2012 will be forming a line to lend to our industry with more relaxed terms extending beyond low rates to longer repayment periods and less collateral. It is estimated that net new bank lending will be over 30% next 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.