Large blow moulded plastic products after 6% growth in 2007 has shown a decline of almost 7-8% in the first 3 quarters of 2008. It is expected that the growth will decline between 5-10% in USA. Two main reasons for the decline are overall drop in economic growth, high cost of PE and other polymers.
The most consistent growth in recent years has been that of large containers and drums. Market demand for these products dropped by 20% during the previous economic recession in 2001, but after that the demand has grown an average of 8% pa. This growth was due to improvements in barrier performance through improved materials and manufacturing techniques; the high cost of alternative materials such as steel; and the need for lighter shipping containers to save the transportation cost. These long-term trends are expected to continue in the near future for blow moulded containers and drums. After the current cyclical downturn in the US economy gets over, demand of these products will rebound to almost level as prevalent before. After a growth of 8% in 2007, consumption of large containers and drums declined to 4% in 2008. Market demand remained sluggish at the start of 2009, but conditions will improve as the year progresses. An annual growth of 8% is expected in 2009. The other segment that continues to attract attention is blow moulded fuel tanks. This was one of the fastest growing sectors in the entire plastics industry at the end of the last decade and the beginning of this one. However, the trend has been predominantly downward during the past four years. After a moderate gain of 3% in 2007, production of these products is down 12% for the year to date in 2008. This decline will persist into early 2009, but the market will start to rebound by the second half. A drop of 15% in 2008 will be followed by a gain of at least 6% in 2009. The continued growth in demand for motor vehicles that are not only lighter and more fuel efficient, but are also manufactured using more sustainable techniques and are more easily recycled or disposed of at the end of their life span. One of the challenges that will confront manufacturers of blow moulded fuel tanks will be designing a product that holds new types of fuel and lubricating products. These may include biofuels, natural gas, or fuel cell technologies.
The predominant trend in US production of large blow parts (not bottles) has been flat to downward in 2007, and this will not change much through the early part of 2008, as per an article by Bill Woods. Overall growth for 2008 is expected to be 5% to 7%. So far this decade, blow molders have been buffeted by three significant negative factors. The first was the downturn in demand that resulted from the recession in the US economy in late 2000 and early 2001, after which certain sectors like the toy sector have not recovered completely. The second factor was the emergence of countries like China as low-cost suppliers of many types of blow molded products. The third factor that has weighed down blow molding production is the high price of resins in recent years.
Industrial drums are made primarily of and the sharp increase in the price of steel in recent years has made plastic drums an attractive substitute for many applications. As was the case for most other blow molded products, the output of plastic drums hit a cyclical peak in early 2000. Production fell sharply in 2001 and stayed down in 2002 and 2003. But this sector bucked the trend in 2004, when demand jumped sharply. The second segment that bears notice is automotive fuel tanks. Unlike most other types of blow molded products, production of plastic gas tanks did not hit a cyclical peak in 2000. If anything, output levels accelerated during the recession and continued to grow rapidly through 2004. In the first four years of this decade, plastic fuel tank production grew at an average rate of more than 15% per year. The rate declined moderately in 2005 and 2006, but it has held steady so far in 2007. Demand for fuel tanks is affected by the overall cyclical trend in demand for cars and trucks. But progress in both chemical resistance and barrier properties of the plastic tank structures have been, and may continue to be, the more important factors in determining future production. The costs of substitute materials such as steel will also play a role.