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PLASTIC PERSPECTIVES
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PLASTIC PERSPECTIVES

Since the 21st century is starting off with the highest prices for crude oil and thus gasoline in 30 years, it seems appropriate to review world wide plastics usage -- so many prices for plastics are affected by the "price at the pump" correlation.

Use of Plastics WorldWide - breakdown by industry in %.

Electrical8Packaging32
Furniture5Construction18
Agriculture3Others23
Automotive6  

Per Capita Consumption of Plastics (in KG)

Europe63Africa3
USA89India1
Canada80S.America7.5
Japan58Others13.7
Russia17  

We can now see which countries and industries are being affected by the growing threat of double digit inflation in our industry's raw material prices - just now beginning to form. Watch prices on ethylene, propylene, benzene, butadiene , xylene (both p and o), and toluene. These are the major petrochemical feedstocks. ( For a list of the feedstocks that go into the raw materials that make up 25 of the most common plastics, from acetal to PET - email me at globltr@aol.com for a free listing).

No where is this run-up in prices more evident than in the PP and PVC markets in this second quarter of 2000. World consumption of PVC is still growing and no new capacity has come on stream this year. The application mix for PVC world wide is:

Film and Sheet - 20%Flooring -4%
Pipe and Fittings - 29%Bottles - 6%
Profiles -15%Coatings -7%
Wire, cable -4%Others - 15%

Some hope for new capacity, especially in polyolefins, is the development of metallocene catalysts, producing very low density PE in the existing plants. Also PE from HDPE to very low density elastic polymers can be produced by just changing the co-monomer contents. Watch for this development to cause more efficiency at existing capacity - thus further adjusting the supplydemand relationships - faster. Current global capacity for metallocene based polyolefins is one billion pounds/year in PE and 675 million in PP. Most of this is based in the US (Dow and Exxon) and Japan (Mitsubishi and Nippon Petro). Following this process is the pilot plant for polycyclic olefins - utilizing ring-type structures based on inexpensive (usually) ethylene that provide materials with high optical clarity and good mechanicals - competing with PC. Thus will product and process development help increase capacity and moderate built in inflation.

World Plastics Scenario: Several significant events have taken place in the last 2 years that have profoundly affected world plastic markets. These were:

The Asian economic crisis

Many announcements of plans to build new resin plants followed by some cancellations due to the slowing down of the economies in the region

A major drop in crude oil prices followed by a lowering of volume prices - this is now reversed

Continuing restructuring of the industry, particularly in the formation of mega-sized joint ventures and mergers.

An explosion of new technology with more new advances taking place now than at any other time in the century-old plastics industry.

These will be the fastest-moving, most exacting times to be in the plastic distribution and fabrication industry - BE THERE!

P.S. Correction: In our last column we began the history of plastics in 1910. A reader from Insul Reps notes that in 1859 vulcanized fiber was invented, which began the modern plastics industry.

Neither The Plastics Distributor & Fabricator Magazine, nor KLW Enterprises Inc., is responsible for the contributed information or opinions contained in this magazine. All such information and opinions are those of the authors.

For more information, click on the Authors Biography at the top of this page.

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