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PE film market is going through change

All over the World, PE film business is going through a significant change in dynamics because of greater market share of China and the other Asian countries in the global PE film market. Highly volatile prices of PE have also added fuel to the fire. The global PE film converting industry is reassessing how to maintain profitability in the PE film business. Among the major international markets, North American market is more affected. As a result, the North American PE converting industry has to be more alert to face the stiff competition from the Asian PE film converters. The major shift that has taken place is:

	Moving from low cost film sector to value added market segments
	Lean organizations to remain profitable
	Setting up joint venture or independent projects in low cost manufacturing places in Asia, particularly in China
	Utilize LLDPE in place of LDPE to save cost
	Develop value added market segments with the help of bi-modal molecular weight PE grades.
	Similarly participate n value added market segments with metallocene PE grades (MPE)

The North American film industry consumed over 6.2 mln tons of PE in 2006. The leading feedstock, accounting for over a quarter of the market in 2006, used was linear PE (LLDPE), with C6 (hexene). It has achieved a high level of penetration thanks to its balance of price versus performance, being cheaper than C8 (octene) grades but offering better performance than the lower cost C4 (butene) grades. C8 suppliers have also been encouraging film extruders to move to C6. It is rare to find any film application which does not contain LLDPE in the construction. The increasing investment in new equipment and co extrusion capability has increased the proportion of LLDPE which can by utilised by companies, with linear rich products now commonplace.

Different types of PE consumed by North America in 2006
	LDPE	18%
	LLDPE	54%
	HDPE	16%
	Reclaim	5%
	Others	7%

Types of LLDPE used during 2006 in North America
	C 4	14%
	C 6	27%
	C 8	7%
	LLDPE	6 %

Recent years have also seen the commercialisation of mPE. Although processing issues remain, it is clear that mPE is increasingly gaining its share more so in the last 5 years. Typically mPE is used in stretch film shipping sacks, liner, personal care & most importantly in food packaging.
PE film industry in North America is expected to grow at 2.6% per year up to 2010 to reach nearly 7 mln tons.

Market segment wise use of PE film in North America in 2006
	Shrink film / stretch film	15%
	Food packaging films	14%
	Consumer products	14%
	Plastic Shopping bags	10%
	Institutional bags / plastic liners	9%
	Agriculture and building films	6%
	Large plastic bags	6%
	Shipping bags	3 %
	Others	23 %

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