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10-29-2009

Forecast: Strong Fourth Quarter Polymer Sales

Plastics industry consultants, AMI Consulting, foresees a strong recovery in European sales for most thermoplastic resins in the final quarter of 2009 as processors re-build stocks and economic recovery begins to take hold in Europe’s major economies. According to the consultants, Q4 2008 was one of toughest markets ever seen for thermoplastic resins with apparent demand shrinking by around 25% as converters destocked and orders for everything from automotive car parts to packaging stalled. Sharp destocking continued through Q1 2009 with volumes down by mid-year by around 15% on the previous year. Because much of the volume loss in Q4 2008 was destocking, AMI expects to see resin sales strongly up in Q4 2009 compared with last year.

The consultants still foresee European underlying demand for thermoplastics down for the full year in 2009 compared with 2008 and predict an overall decline of around 4% for 2009.

The market is mainly being driven by packaging, which now accounts for over half of all thermoplastic usage. Hygiene and medical markets are also still performing strongly, although these tend to be small markets in volume terms. Car production has remained weak impacting on demand for engineering resins and is not expected to pick up until after 2011.

AMI’s research shows the polymer demand in Europe is increasingly pegged to GDP growth, which means that thermoplastic demand is reliant on a recovery in consumer spending and investment going forward. They therefore anticipate modest growth of 1–2% in polymer demand for 2010 and slightly more robust growth of 2–3% for 2011 and

2012.

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