US plastic film demand expected to grow
According to the latest predictions from The Freedonia Group, demand for plastic film is set to increase in the United States at an average annual rate of 1.9 percent to 16 billion pounds by 2016, reaching a total market value of $19 billion.
The research from The Freedonia Group revealed that plastic film manufacture benefits immensely from the versatility in products available. The wide range of plastic film for packaging actually allows downgauging, which in turn leads to a lower amount of material needed, as well as to reduced production costs and shipping costs, while at the same time it enables producers to retain the needed quality characteristics. However, this also has a downside, as it results in lower volume needed and puts constraints on business growth.
The growth outlook is most positive for food packaging in several categories, including weight saving beverage pouches, frozen food packaging and packaging for confections. Packaging designed to increase food product shelf life, especially for dairy products, is also well positioned for solid growth, the research found.
The latest predictions are based on a market analysis of the current economic environment, historic market trends, recent demographic trends, pricing and regulatory changes that may affect the industry, Food Production Daily reported. The research takes into account data from nine of the biggest plastic film producers in the United States.
The research by The Freedonia Group also looks at demand forecasts for different types of plastic film. Perhaps not surprisingly, the highest growth is expected in demand for degradable plastic film, with projections indicating an average annual rate of over 10 percent, as industries strive for development of more environmentally friendly products and continue to place more importance on sustainability.
Demand for linear low density polyethylene (LLDPE) is likely to remain high and it will retain its leading position as the most commonly used film, constituting about half of the total demand by 2016. It is likely to gain more ground in markets such as medical and pharmaceutical products, snack foods and stretch and shrink wraps. Meanwhile, conventional low density polyethylene (LDPE) will grow at a relatively slow rate, as it is replaced by LLDPE in many of its applications.
Overall, high density polyethylene (HDPE) is expected to grow at an above-average rate over the next few years, despite subdued demand for applications such as retail bags. HDPE will make up for this through market gains in packaging for snack foods, baked goods and grain mill products. Similarly, polypropylene film demand will also enjoy stable growth, fueled by its market gains in packaging for the same food categories.
Researchers at The Freedonia Group predict that polyethylene terephthalate (PET) is unlikely to change the status quo, as its position will be balanced by growth in usage for snack foods, dairy products and frozen foods and decline in demand for photographic and magnetic film. On the other hand, polyvinyl chloride (PVC) is expected to record solid growth, thanks to medical products packaging and shrink wrap applications.