15 July 2009 17:56 [Source: ICIS news]
By Nigel Davis
LONDON (ICIS news)--Organisation for Economic Co-operation and Development (OECD) data released on Wednesday show that the slump in G7 nation trade flows continued into the first quarter, with the quarter-to-quarter drop in double digits.
Against the backdrop of what appears to be a modest recovery, the figures give an impression of what will be needed to make up for the slump.
Unemployment is taking hold in the
We have yet to fully understand the depth of the downturn and what it will take to return to something like trend line growth.
The slowdown began in the first half and accelerated in the second towards massive de-stocking at the year end.
In the last quarter, the decline in demand was on average between 20% and 25% for most materials.
“Few were prepared,” AMI says, “for the precipitous slide from August which wiped out five years of growth for polymers in just four months.”
PET (polyethylene terephthalate) demand held up as might be expected but not that well. The decline recorded by AMI for PET in 2008 of 3% has to be compared with recent annual growth rates approaching 6%.
Further pressure has been put on producers and consumers in the converting sector in 2009.
And despite what appears to have been a mid-year recovery, driven primarily by the packaging sector, AMI expects a further drop in the volumes of polymers processed in
Structural weaknesses and underinvestment in the sector have been horribly exposed by the downturn. Significant restructuring, increased investment from outside
The consultants are right in focusing on the sort of structural change that might be expected for plastics processing to pull healthily out of the downturn. The same sort of restructuring might be expected across larger parts of the polymers industry and in chemicals.
So far the industry has survived very much intact although the number of plant closures is mounting steadily as companies struggle to realign in extremely difficult times.
Chemical industry economists decided earlier this year that European chemicals output might decline 11% in 2009. They suggested that the sector would not be back on its pre-recession growth trend until 2012.
There is very little sign of life currently in the chemicals or the polymers business in
De-stocking may, thankfully, be at an end, and there may be light at the end of the tunnel. But that light is a long way off.
For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.
Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.
|ICIS news FREE TRIAL|
|Get access to breaking chemical news as it happens.|
|ICIS Global Petrochemical Index (IPEX)|
|ICIS Global Petrochemical Index (IPEX). Download the free tabular data and a chart of the historical index|