NPE ’12: US plastics sector to see steady growth for years - SPI

02 April 2012 15:14  [Source: ICIS news]

ORLANDO, Florida (ICIS)--The US plastics sector should see steady growth for years to come, a top industry official said on Monday, as the US economy continues to expand, export demand increases and China’s manufacturing cost advantage erodes.

Bill Carteaux, president of the Society of the Plastics Industry (SPI), told a press conference that the plastics sector “has fared very well since the recession”.

Speaking on the first full day of the 2012 international NPE plastics conference and exhibition, Carteaux said that he expects the US economy to see GDP growth this year of 2.4% and GDP expansion of 2.8% in 2013.

“Manufacturing, and especially plastics manufacturing, will play a significant role in that continued growth,” he said.

The last NPE event, held in Chicago, Illinois, in June 2009, saw reduced participation by both resins manufacturers and producers of plastics applications machinery as the 2008-2009 US recession took its toll. 

The recession officially ended in June 2009, and the US economy has been in a modest but continuing recovery since then.

“This is a resilient industry, and things are not sombre as they were in 2009,” Carteaux said.

“We are seeing a lot of restoring in the US manufacturing sector,” he said, “and the labour cost advantage that China once held is changing, those labour costs are going up, as are other costs there.”

“When you add in energy and shipping costs for China, all of it is eroding the cost advantage in China,” he said.

Carteaux said that the new abundance of natural gas supplies from shale formations in the US has played a major role in the US manufacturing revival and “has had a dramatic impact on our plastics industry”.

This year’s NPE is the first to be held since US shale gas production has emerged as a major cost-savings feedstock factor for domestic resins manufacturers and their downstream applications customers.

Carteaux noted that US resins manufacturing uses natural gas for 80% of its feedstock, giving US producers a cost advantage over foreign plastics firms who use more costly oil-derived naphtha feedstocks.

“Shale gas is creating a positive future for our industry, perhaps for decades to come,” he said.

In addition to a growing feedstock cost advantage and increasing production and shipping costs in Asia, Carteaux said the US plastics industry is benefitting from strong export sales.

He said the sector saw exports increase by 24.2% in 2010 from the prior year to a total of $341bn (€256bn).  The plastics industry’s trade surplus also grew significantly in 2010, rising by more than 27% from the prior year to $16.2bn.

Carteaux said that part of the expected growth for the US plastics sector this year will be driven by growth in one of its key consuming industries, automobile manufacturing, which is expected to gain added strength this year.

Sponsored by SPI, the NPE conference and exhibition opened on Sunday and runs through Thursday.

As many as 60,000 registered participants are expected to attend, and more than 1,900 companies are exhibiting their products and services on the Orange County Convention Center show floor.

($1 = €0.75)

Paul Hodges studies key influences shaping the chemical industry in Chemicals and the Economy

By: Joe Kamalick
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