Global plastic packaging market poised to surge to USВ375 bln by 2020

MOSCOW (MRC) -- Plastic Packaging (Rigid Plastic Packaging and Flexible Plastic Packaging) market for food & beverages, industrial, household products, personal care, medical and other applications states that global demand for plastic packaging market was valued at USD270 bln in 2014, and is expected to reach USD375 bln in 2020, growing at a CAGR of 4.8% between 2015 and 2020, as per Plastemart with reference to Zion Research.

In terms of volume, the global plastic packaging market stood at 81,750.0 kilo tons in 2014.

Plastic packaging is a type of casing in the form of plastic containers, bags, pouches, and jars to be used for food & beverages, personal care products, household products, and industrial goods. High-density polyethylene (HDPE), low-density polyethylene (LDPE), polyethylene terephthalate (PET), polypropylene (PP), and polyvinyl chloride (PVC) are mainly used in plastic packaging. Plastics can be easily molded or altered into any shape as per the packaging requirement of goods. It is one of the fastest growing segments of the packaging industry. It combines the best qualities of plastic to deliver a wide range of protective properties while using minimum quantity of material. Plastic packaging is broadly used in consumer products, and in industrial applications. It is used to market, protect, and distribute a wide range of products.

Strong growth of global food and beverage market is mainly driving demand for plastic packaging. Swiftly expanding pharmaceutical and medical industry has been resulted into rapid growth of plastic packaging. Moreover, uperior aesthetic value and excellent barrier properties of plastic against moisture and air are another important factor driving demand for plastic packaging. However, fluctuating prices of raw materials is one of the major challenges for the manufacturers of plactic packaging. Rigid and flexible are two types of packaging products. In rigid plastic packaging, product is packed in a rigid cases or container and for flexible packaging the material used is flexible that takes the shape of the products when it is packed. Furthermore, rigid plastic packaging segment dominate the market with significant shares in 2014. And it is expected to continue this trend owing to the demand from pharmaceutical industry.

Food & beverages packaging applications segment was the largest segment of global plastic packaging industry and accounted for around 55% share of the entire market in 2014. It is expected to remain prolong application over the forecast period owing to high demand of packed food. Moreover, plastic packaging is expected to witness the fastest growth from the medical application segment in next five years. Asia Pacific was dominating regional market for plastic packaging owing to strong demand from China and India. It accounts for around 35% share of the overall market volume consumption in 2014 and further expected to remain major regional market for plastic packaging due to the heavy consumption of packed foodstuff and changing lifestyles during the next five years. Asia Pacific was followed by North America and Europe. Both the regions are expected to have lucrative demand during forecast period.

We remind that, as MRC reported previously, global ethylene market (Industry) was valued at USD156 bln in 2013 and is projected to reach USD234.2 bln by 2020, expanding at a CAGR of 6% from 2014 to 2020, as per Transparency Market Report. The global ethylene market is fueled by growing demand in packaging applications, booming construction industry, and rising demand from the automotive sector.
MRC

MOSCOW (MRC) -- The global polystyrene (PS) market is expected to reach USD28.2 billion by 2019, at a CAGR of 5.1%, as per Plastemart with reference to Research and Markets.

The growth is mainly attributed to the increasing rates of industrialization and globalization across the globe. This is also expected to give impetus to the global demand for polystyrene market in packaging and electronics applications. China is anticipated to be the largest market for polystyrene, followed by other emerging economies in the Asia-Pacific region. Asia-Pacific is the most dominant region in the polystyrene market owing to increasing plastic consumption and rapid urbanization in this region.

Packaging and electronics are estimated to be the two largest application segments of the polystyrene market in 2014. These segments are projected to grow at the highest CAGR in global polystyrene market between 2014 and 2019. High penetration of polystyrene in the electronics and appliances industry is anticipated to fuel the growth of the global polystyrene market.

Asia-Pacific is projected to continue to lead the polystyrene market till 2019, followed by North America and Europe. Asia-Pacific and South America & MEA are the fastest-growing regions in the polystyrene market. Asia-Pacific has its major demand and supply of polystyrene concentrated in the north-eastern region, with China being the largest producer and consumer of polystyrene, followed by Japan, Korea, and Australia.

We remind tha, as MRC informed previously, in December 2015, Trinseo, a global materials company and manufacturer of plastics, latex and rubber, and its affiliate companies in Europe announced price increases for all polystyrene (PS), ABS and SAN grades. Thus, the December contract and spot prices for the products listed below rose as follows:

- STYRON general purpose polystyrene grades (GPPS), STYRON and STYRON A-TECH high impact polystyrene grades (HIPS) - by EUR60 per metric ton;
- MAGNUM ABS and TYRIL SAN resins - by EUR30 per metric ton.
MRC

MOSCOW (MRC) -- Evonik will present the results of this development work alongside its portfolio of established products at the coming JEC World, the leading tradeshow for composites, in Paris from March 8 to 10, said the producer on its site.

Since the establishment of a project house in 2013 in which expertise from various operative units throughout the Group was converged under one roof, Evonik’s strategic innovation unit, Creavis, has considerably intensified research and development activities on composites.

Addressing one of the biggest problems to date—namely the economic efficiency of the large-scale production of complex molded parts—the project-house team’s display will include the presentation of its newly developed PulPress technique, which now enables the automated and consistent manufacture of sandwich-profile components measuring up to 1.2 meters in length, with practically no waste produced. The technique uses Evonik’s ROHACELL high-performance structural foam, a lightweight, solid material already used effectively in composites.

Beyond that the project house has developed a new material class for the manufacture of prepregs (pre-impregnated fibre materials and fabrics). It is easier to work with than the conventionally used polymer components in fiber composites and it endows the finished component with excellent mechanical properties. This new class of material is called thermally switchable hybrid polymers and combines the beneficial properties of thermosetting polymers (excellent mechanical, thermal, and chemical stability) with those of thermoplastic polymers (quick and easy to use).

Aside from these two areas of development, the project house will also be displaying innovations it has come up with for flame-retardant composites, FRP metal hybrid materials, thermoplastic UD tapes, and composite surfaces. "Developments of this kind," says Dr. Sandra Reemers, "are important for the automotive and aerospace industries, for the wind-energy sector, and for the oil and gas extraction sector. Evonik’s existing product portfolio and the fact that it works hand in hand with its customers, means we have very specific insight into the demands of the market, today and going forward. And our innovation activities are resolutely geared to meet those demands."

As MRC informed earlier, Resource Efficiency Segment of the Essen-based Evonik Group received the European Plastics Innovation Award in the "Material Innovation" category for its use of polyamide 12 (PA 12) VESTAMID NRG in high-pressure gas pipelines.

Evonik, the creative industrial group from Germany, is one of the world leaders in specialty chemicals. Its activities focus on the key megatrends health, nutrition, resource efficiency and globalization. Evonik benefits specifically from its innovative prowess and integrated technology platforms. Evonik is active in over 100 countries around the world.

MRC

MOSCOW (MRC) -- Moody's Investors Service, (Moody's) has changed to negative from stable the outlook on all ratings of Clariant AG (Clariant) and its subsidiary Clariant Finance (Luxembourg) S.A., said the company on its site.

Concurrently, Moody's affirmed the company's Ba1 corporate family rating (CFR), Ba1-PD probability of default rating (PDR) and Ba1 ratings assigned to the various senior unsecured debt instruments of Clariant and Clariant Finance (Luxembourg) S.A.

The change of outlook to negative reflects Clariant's lack of progress in reducing debt leverage in the wake of the acquisition of Sud-Chemie AG in 2011, as the group consistently generated negative free cash flow after capex and dividends (FCF). Despite a relatively resilient operating performance, this has left its financial metrics weakly positioned relative to the Ba1 rating at the 2015 year-end.

Looking ahead, Moody's expect that the organic growth potential of Clariant's enhanced portfolio businesses as well as a continuous focus on innovation and operational efficiency will help underpin future operating profitability. Also, following the carve-out of Plastics & Coatings into a separate legal entity at the start of 2016, Clariant intends to put the emphasis on maximizing absolute EBITDA and cash flow generation for this mature business. Combined with reduced restructuring cash outlays, increased focus on improving working capital and a return to normalised capex levels of CHF300-350 million p.a., this should help strengthen the group's future operating cash flow generation.

A stabilization of the rating outlook will require that Clariant return to positive FCF on a consistent basis, so to be able to permanently reduce debt and reposition its financial metrics in line with the Ba1 CFR, including total debt to EBITDA below 4x (leaving net debt to EBITDA close to 3x given the large cash reserves typically held by the group) and RCF to net debt close to 20%.

As MRC informed earlier, Clariant Masterbatches Saudi Arabia, a joint venture (JV) between Clariant and Rowad National Plastic Company, has started construction of a new masterbatch production unit in Yanbu, Saudi Arabia.

Headquartered in Muttenz, Switzerland, Clariant AG is a leading international chemicals group. In 2015, Clariant reported revenues of approximately CHF5.8 billion and EBITDA of CHF767 million.
MRC

MOSCOW (MRC) -- Asia could source ethylene and propylene from farther afield as Japan continues to shut petrochemical production capacity, said Fairplay.

Japan exported 800,000 tonnes of ethylene and 1.3 million tonnes of propylene, a 10% decline from 2014. During 2015, Japan also saw another petrochemical plant closing down, namely Sumitomo Chemicals’ plant in Chiba. This closing removed an estimated 416,000 tonnes of ethylene capacity and 288,000 tonnes of propylene capacity from the market.

Both propylene and ethylene are used to make plastics. At least one more Japanese petrochemical plant due to close down this year. The Ashai Kasei ethylene/propylene plant in Mizushima is set to close down following a cooperation agreement with Mitsubishi Chemicals linked to their similar production in Mizushima.

The closing down will likely remove annual capacity of 470,000 tonnes of ethylene and 300,000 tonnes of propylene from Japan. Norwegian shipbroker JG Grieg commented, "Our take is that the reduction may have a negative impact on Japan’s export volumes for 2016 and on."

On the other hand, IHS Chemical forecasts that despite low crude oil prices, new US shale gas-derived chemical expansions continue to move forward, and more than 100 million tonnes of new capacity will be added in the US chemical industry by 2025. Major US chemical production additions include ethylene, propylene, methanol, ammonia, and their derivatives, such as plastics and fertiliser, improving the US net export position for these products.
MRC