Global production of light naphtha, an essential steam-cracker feedstock for the production of gasoline and numerous chemicals, is increasing and could create a global surplus that exceeds market demand by as much as 14 mln metric tons by 2020. This capacity expansion and surplus of light naphtha is occurring in large, partly due to the rapid expansion of tight oil and shale gas production in North America, and in particular, the US, which will surpass the Middle East to become the world’s largest exporter of light naphtha by 2020, according to a new international market review from IHS. The market is currently faced with a global excess in terms of oil production, and secondly, EPB (from natural gas liquids NGLs) displacing some of the naphtha demand away from steam-cracker feeds, which will further add to oversupply of naphtha during the next five years. While current production continues to increase, the growth rate of light naphtha consumption is constrained somewhat by the penetration of ethane, propane and butane (EPB) gases in the steam-cracker feedstock slate. All seven new ethylene plants currently under construction in North America have been designed to utilize ethane feed. Additionally, the availability and low prices of EPB feed has already minimized the use of naphtha as steam-cracker feedstock in North America.
Growth in global manufacturing output and greater spending on packaged goods worldwide will aid rigid packaging demand. Growth of packaged goods will be particularly driven by food and beverages in the Asia Pacific region. World demand for rigid packaging is forecast to increase 6.4% pa to US$472 bln in 2016. Besides growth in global manufacturing output and increased consumer spending on packaged goods worldwide, the factors contributing to rising demand include demographic trends such as increasing urban populations, as urban consumers tend to use more packaged foods than their rural counterparts. Rigid packaging consumption will also be supported by the extensive and expanding recycling infrastructure for metal, glass, and plastic.
The largest markets for rigid packaging are food and beverages, which together represented 64% of total rigid packaging demand in 2011. Strong gains are expected for plastic bottles and containers due to cost and performance advantages, as well as further development of food-grade materials. Beverage applications for rigid packaging will benefit from expanded processing capacity. Rigid packaging demand in pharmaceutical applications is forecast to see above average growth, boosted by fast growing pharmaceutical manufacturing capabilities, especially in Asia. The most rapid gains in demand for rigid packaging will be seen in the world’s developing regions. In particular, the Asia Pacific region will post the fastest growth and remain the largest market due to its large food and beverage industries. In contrast, market maturity in developed countries (as well as market saturation in bedrock applications such as bottled and canned beers and carbonated soft drinks) will serve to limit faster gains in rigid packaging demand. Overall, some of the best growth rates are expected in Indonesia, China, and India, with Brazil, Turkey, Russia, and Mexico also forecast to see strong gains.
In terms of materials, plastic will continue to account for the largest share of demand and will also see the fastest gains, as plastic containers grab market share at the expense of paperboard, metal, and glass packaging in many applications. Gains for plastic containers will be attributable to their cost advantages over some alternatives, shatter resistance, resealability, graphics capabilities, ease of opening and dispensing, and improved resin and processing technologies. Metal cans will remain an important segment of the rigid packaging mix due to their durability, long shelf life, tamper resistance, ease of storage, recyclability, and the economic advantages of canned items in controlling food expenditures, as metal cans are often used to package low-price food items. Opportunities for paperboard rigid packaging will reflect a competitive price structure, suitability for high quality graphics, and a favorable environmental profile. On the other hand, the heavier weight of glass containers and their risk of breakage will continue to limit applications -- especially in export markets -- due to high shipping costs.
As per Research and Markets, the global plastic packaging market is estimated to grow at a CAGR of 6.06% over the period 2014-2019. Technological improvements and advancements are one of the major trends being observed in this market, as corporations are investing a huge portion of revenue in R&D to come up with new innovations in plastic packaging. Modern microprocessor-based controllers and intelligent control systems are used to make hi-tech plastic, which is resistant to extreme conditions of temperature and pressure.
According to the report, one of the main factors affecting the market positively is the increase in F&B consumption worldwide. Most F&B products use either flexible or rigid plastics for packaging as they are non-reactive and cheap. Increased spending power coupled with the growing requirements of people has pushed the growth of the F&B market. Plastic packaging even aids companies in marketing and advertising campaigns by allowing innovative and attractive designs. Further, the report states that one of the main challenges in the market is growing competition from other forms of packaging. Items such as wood and paper are gaining popularity among both manufacturers and consumers because of the variety of options provided by them. The F&B sector in particular, prefers using paper substitutes
The surging economies in the developing nations, the expansion of the on-the-go lifestyle and the ageing population are significantly increasing demand for more convenient, easy-to-carry, light, safe and functional packaging, without comprising on the barrier properties and cost effectiveness. This has given rise to a boom in the rigid plastic packaging market as rigid plastic is a light, malleable and durable material that can adapt to various packaging designs and requirements. It is also a cost-effective choice of packaging. Visiongain estimates that the global rigid plastic packaging market will reach US$167.4 bln in 2015.