Production overcapacity, weak demand, and pressure from imports have contributed to slow growth in the US PET (polyethylene terephthalate) plastic blow molded packaging Market, according to industry experts cited by Plastics News in November 2016. Even as the US industry has consolidated over the last few years, overcapacity persists, which has caused PET producers to reduce prices as they compete for market share and to cut costs in an effort to preserve margins. Industry watchers suggest that PET converters’ cost-cutting efforts have come at the expense of product innovation investment, as some producers have reduced engineering staffs. Manufacturers also face competitive pressure from imports, as well as alternative packaging products, including paper and stand-up pouches, that have innovated in marketing and product design. Soft drink and water packaging remain steady markets for PET converters, but dairy and juice markets are flat. Food offers an opportunity for growth, but further hot-fill and barrier (oxygen, moisture, UV light) innovation is needed. Other growth markets include dairy substitutes (almond and soy milk), and sports drinks. One upside for PET converters is that low oil prices are likely to keep resin feedstock prices in check.

• US nondurable goods manufacturers’ shipments of chemical products, an indicator of demand for plastic resin and synthetic fibers, rose 2.0% year-to-date in November 2016 compared to the same period in 2015.
• The spot price of crude oil, a key raw material in plastic resin and synthetic fiber manufacturing, rose 50.3% in the week ending January 13, 2017, compared to the same week in 2016.

Posted by Jim Zipursky.

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