Plastics production in Europe expected to grow in 2006 after a dull 2005

16-Jun-05

Plastics production is expected to show slow growth this year in many European countries, but a healthy growth rate has been projected for 2006. It is indicated that, after a dull 2005, production growth in European countries will increase in 2006. Germany's production too is likely to drop to a level of less than 0.5% in 2005 compared to more than 2.5% growth recorded in 2004, but increase by about 3% in 2006. Growth is speculated to slow down in France too, which may recover next year. The situation in Italy is also not favourable, with production expected to fall this year by nearly 2%. Italy is contemplating a positive growth to return in 2006, at over 2%. The Italian market for injection moulding machines has been affected negatively as the market shows a fall in demand by about 30% in 2005 against 2004. A number of moulding companies in Italy have shifted manufacturing base to more cost effective destinations such as Romania and neighbouring Slovenia. After opening an assembly plant in Brescia, Chinese injection moulding machinery maker Haitian has gained a 20% share of the Italian market, eating into the share of the established players. However, Spain seems to be the only major European player to show an increasing production growth, from about 1.5% in 2004, to 2.5% in 2005 and 4% forecasted for 2006. How are the two major global players expected to perform in 2005? USA and China both seem to be poised for growth. Backed by solid economic growth of 4.2%, the best seen in the last 15 years in USA, plastics grew at 6.9% and reached a level of almost 52 million tons in 2004. 2005 appears to be good for an economic growth, with plastics expected to grow well in 2005. It will not be surprising if US almost repeats its performance of 2004 in 2005. The Chinese economy is expected to grow by 8.5 % in 2005 if not by 9%, and petrochemical products are expected to show at least growth of 8.5% over 2004.