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Townsend Polymer Services & Information Newsletter
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 When you need answers. In this issue:
- Mild growth forecast for North America
- China's plastic bag ban takes effect
- CLASS Asia effort gets underway
- Quarterly review of resin market now online
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 Reports project smaller N.A. growth for PE, PPProjected annual PE consumption growth by region
Average annual growth rate percentage for 2007-2012.
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As the economy continues to struggle and resin prices remain at all-time highs, the forecasts from the Townsend Reports on Polyethylene and Polypropylene serve as a chilling reminder that the plastics industry is experiencing more than a bump in the road.
North American consumption of polypropylene is expected to continue to grow at about 2 percent per year through 2012, a much slower pace than historical rates due to ongoing converter flight and increased imports of PP products. That’s also a much slower rate than the rest of the world is expected to see.
The strongest growth will be seen in the smallest segments, including sheet and blow molding. The fibers segment is expected to be virtually stagnant.
The story is similar for polyethylene, but growth is expected to be at a more moderate rate of 2.6 percent per year through 2012. As with PP, that growth rate is well below the global average due to converter flight and increased imports of PE products.
However, growth is more uniform for PE than in PP, with future growth strongest in pipe & conduit, as well as rotomolding. High-density polyethylene and linear low-density polyethylene are expected to see stronger growth.
PE converters have helped maintain higher growth rates by being more aggressive in finding new markets and pursuing smaller potential markets.
The Townsend Reports are released annually and include a highly detailed look at the global markets for polyethylene and polypropylene. For more information on the reports, see our Web site or contact Shari Gangestad. |
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China's plastic bag ban examined
Sad days for bags
Townsend's latest study is now on sale. For information, view the prospectus.
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The industry’s eyes are on China as it moves to implement a ban on plastic bags. The bag ban in China could serve as a model for other nations to follow, and reaction to the ban – from consumers, retailers and bag makers – will give clues on what we can all expect as cities and nations mull similar moves.
The ban was announced in January, and a month later the largest maker of plastic bags ceased operations. The ban on bags of less than 0.025 mm thickness took effect on June 1. Coupled with a new labor law that increases labor costs, these are difficult times for Chinese resin processors.
Nationally, China uses 37 million barrels of crude oil each year to produce more than 1 trillion plastic bags.
Townsend, in partnership with CBI China, has undertaken an exhaustive examination of the plastic bag ban in China, and the results are surprising.
Townsend began the effort by seeking to prove or disprove three common assumptions made about the ban:
1) The ban in China will reduce domestic demand for plastic resin.
2) A build-up in garbage bags as a replacement for trash disposal will help compensate for the loss in demand.
3) Chinese exports of plastic resins will increase substantially to dispose of excess domestic resin.
The survey covered seven different regions in China and three different downstream markets – bag makers, retailers and consumers. The study also sought to determine what replacement products would rise up as bag makers looked for alternatives.
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CLASS Asia project launches
For years, Townsend’s European Customer Loyalty and Satisfaction Survey has been highly prized by resin suppliers. It gives them an accurate assessment of how their customers view them in terms of customer service, product quality, price and more.
Now, Townsend is gearing up to offer a new series of CLASS projects in Asia. This fall, Townsend will meet with participating suppliers to establish the design of the first CLASS Asia project, covering China, Hong Kong, Taiwan, Korea and Japan. Upcoming programs will cover Southeast Asia and then South Asia. PE and PP East Asia 2009 will be conducted using the highly successful format developed by Townsend, which includes:
- A design committee meeting with the charter subscribers that defines the final program scope and coverage
- In-depth interviews with approximately 750 PE and PP customers
- Detailed analysis of the extensive data generated
- An executive summary presentation and raw data files that allow for further analysis
The program will focus upon: (1) determining the attributes that customers most value when choosing a supplier and understanding which attributes are critical to maintaining customer loyalty; (2) identifying the relative levels of performance in each attribute, offered by each major competitor; and (3) defining those areas that will be critical to achieving success in the future.
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Resin market review now online
Copies of the quarterly North American resin market review and an audio recording of the presentation are now available through IDES.com. As with the Webinar itself, there is no charge.  The Webinar, led by Plastic Market Monthly editor Jerry Fordyce, drew a sizable crowd this quarter, and the Q&A session ran a bit long. IDES.com has now posted answers to those questions left out of the Q&A due to time constraints.
Townsend and IDES.com present the resin market Webinar each quarter. This newsletter will note the time and date of the next Webinar as soon as it is scheduled.
The quarterly Webinar is based on pricing data collected by the Plastic Market Monthly. For a sample copy of the PMM, please see our Web site.
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Townsend Polymer Services & Information
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