Demand for engineering plastics will rise 3.1%/year to reach 5. 4 billion lbs by 2012, says a recent report from The Freedonia Group (Cleveland). “Advances will be driven by a continued trend toward the replacement of metal parts with high-performance plastic resins,” Freedonia says.
The automotive as well as electrical and electronic products industries, the main markets for engineering plastics, will drive sales of these resins to $10.7 billion by 2012, Freedonia says. These industries combined accounted for nearly 60% of total volume in 2007, Freedonia says. Fastest growth is expected in the consumer and institutional market, driven by expanding use of high-performance resins in medical product applications, Freedonia says.
Engineering plastics continue to make their way into motor vehicle components, which will result in the volume of resin used per vehicle to reach 12 pounds by 2012. “Motor vehicle markets will see favorable gains as automotive production rebounds from a depressed 2007 base,” Freedonia says. Also, a greater volume of these resins will be used in vehicle components by 2012, it says. “With the upcoming hike in fuel efficiency standards and c hanging consumer preferences for ■ ENGINEERING PLASTICS SCOREBOARD* v ehicles with low gas mileage, auto- (in percent) m akers are increasingly focusing on 2012 total: $5.4 billion f uel economy. One way to do this is 2002-07 2007-12 b y reducing vehicle weight through Acrylonitrile butadiene styrene -0.8 1. 4 r eplacing metal parts with plastics,” s ays Freedonia analyst Kent Furst. Polycarbonate 3. 3 3. 8 A crylonitrile butadiene styrene Nylon 2. 3 3. 4 ( ABS), polycarbonate, and nylon will Thermoplastic polyester 2. 6 3. 8 c ontinue to be the largest-volume Polyacetal 0.9 2. 6 e ngineeringplastics, Freedoniasays. T he three plastics will account for Other resins 3. 4 4. 6 m ore than 75% of total demand by Total 1. 6 3. 1 2 012, Freedonia says. Of these, the *Annual growth rates. Source: The Freedonia Group (Cleveland). m ost rapid advances are expected f or polycarbonate resins, driven by o pportunities in motor vehicles, medical supplies, and construction products, it says.
“Above-average gains for nylon will be fueled by a rebound in motor vehicle output, where the resin is penetrating new applications in under-the-hood components,” Freedonia says. However, the engineering plastics industry is not immune to rising energy and feedstock costs, which have hit commoditized resins like ABS and polycarbonate the hardest, Freedonia says. ABS demand is expected to “grow at a pace well below the overall average, restrained by market maturity and competition from commodity resins such as polypropylene,” Freedonia says.
Some engineering plastics, including ABS, are being replaced by commodity resins. “ Lower-end engineering resins like ABS are hurting the most from competition with commoditites like polypropylene. This is most apparent in cost-competitive markets such as appliances and consumer products, especially when product manufacturers have to worry about matching low-cost overseas suppliers,” Furst says.
Smaller-volume specialty plastics including polysulfones, polyphenylene sulfide, and polyimides will achieve the fastest gains among engineering resins, Freedonia says. The increasing need for high-temperature performance and corrosion resistance in electronics and automotive markets is expected to further gains for these resins, even though their high costs, which generally range from $6 to over $40/lb, may limit their use in filling specialized performance needs, it says.
Though the global economy is facing a downturn, the engineering plastics industry is expected to fare well. “Markets for engineering plastics are by no means recession-proof, since they are dominated by durable goods such as motor vehicles, appliances and electronic equipment,” Furst says. Demand is just now recovering peak volumes from before 2000-02, he says. “However, sales of engineering plastics have historically outpaced durable goods as a whole,” he adds. —LINDSEY BEWELY, RC, and GDLM
“ Early on we thought that the appliance b usiness would be a casualty because of lower c onsumerspending. Butsofarthatmarket h asonlybeeno byabout2%.However, p ackaging has been down 6%. at includes b oth food packaging and also electronics.” e e biggest hit has been to construction d emand, down more than 10%. There have also been variations in non- c ommodity grades, says Bob Snyder, v .p./performance styrenics for Nova. T hat business was not included in the jv. “ Performance moldable foam has been a b right spot,” Snyder says. “Also, we have not s een the full impact of the housing slow-d own because of high insulation values for e xpanded polystyrene (EPS)” as the drive f or improved energy efficiency has kept d emand strong. Another EPS application is in concrete as a r eplacement for light aggregate. There have b een gains because EPS improves strength o f the concrete and because it is lighter to s hip than the mined aggregate, Snyder s ays. Not surprisingly, automotive remains t ough,withcarsalesoffby40%thisyear, h e says. But automakers are retooling to prod uce smaller, more fuel-efficient cars while k eeping the big-vehicle-style dashboards, h eadds. Thatbodeswellforstyreniccopo-l ymers. “Itgivesussomeniceprospectsfor t henearfuture,”Snydersays. While EPS demand has not fully felt the e ffects of the housing downturn, the impact o n North American polyvinyl chloride ( PVC) producers has been brutal, producers s ay. Arapidrun-upinfeedstockandenergy p rices put additional pressure on the indus-t ry this year, producers say. At the end of the second quarter, natural g as and ethylene prices had risen 38% and 2 7%, respectively, year-on-year, Georgia G ulf says. Over the same period, PVC prices h ad resin approximately 7%, it says. e short-term outlook for PVC is a con- t inuation of the depressed demand conditions t hat have a icted the industry this year, “ possibly accelerated due to the overall slow-d own in the economy,” Formosa Plastics says. “ Overall, the global PVC industry is down a bout 4%-5% for the year, and we expect t hat it will probably end up about the same or m aybe 6% downby the end of the year.” Improvement in the housing market is n ot expected in the near term, Formosa s ays. “There”s a lack of confidence in the m arket. If you look at housing starts data a few months ago, it certainly looked like few months ago, it certainly looked like we had reached the bottom of the trough.
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