Economically, 2008 was one of the most turbulent years in the past few decades, where the World slipped into a whopping recession that reminds economists all over the globe of the Great Depression of 1929-30. The year began with Northern Rock being nationalized and ended with the biggest financial scam in the history of the world. During the year, one of America's Big 4 investment banks, Lehman Brothers was allowed to go to the wall by US regulators in September; Bank of America swallowed Merrill Lynch. The market capitalization of General Motors is now lower than it was in 1927. Prediction of world gross domestic product (GDP) growth in 2008 has been down revised to 2.1%. Next year is likely to be even worse, with current expectation of GDP growth in 2009 being pegged at 0.9%. This year, GDP growth in China has been projected to slow to around 9% from around 11%. India may end up between 6.5-7% in 2008 although the Government is hopeful that it may reach 7.5%.
What startled the World, was the brisk pace of fall in oil prices from all time highs to 4 year lows from US$147/barrel in July to US$36/barrel in early December. Immense fluctuation in polymer feedstock prices was seen in 2008, resulting in volatility and wide price disparity of all polymers such as PE, PVC and PS. Prices peaked during June/July 2008, and making a sudden about turn, sank in the last quarter of 2008. It is difficult to predict the oil price in 2009 but most likely the price will range between US$50-100/barrel. Polymer prices are likely to go up when oil prices rise above US$50/barrel. Polymer growth in 2008 has been downbeat as the commodity polymers have shown negative growth in 2008 over 2007. The growth of polymers in Asia continues to be higher compared to that in the other regions but is pegged lower by 2-3% in 2008 as compared to 2007. Global polymer consumption in 2008 is estimated to hover around 250 mln tons.
Indian polymer industry, after a very long time is expected to see either flat or negative growth in 2008. The total consumption of polymers for plastics application in India in FY-2008 is expected to be 6.75 mln metric tons. The government is trying a balance between growth and controlling inflation and was biased in favour of growth, leading to announcement of a stimulus package earlier this month. Even if industrial growth continues to remain weak, the growth rate of India 's GDP is most unlikely to turn negative since the services and agriculture sectors are likely to continue to grow. Olefin markets in Asia are projected to have a jerky journey in 2009 as markets remain bearish due to estimates of muted spot pricing and oversupplied downstream markets. Since supplies have already been restricted by the producers, it remains to be seen if buyers would be successful in bringing down prices from 2008 levels. Read more in Huge fluctuations in polymer feedstock prices resulted in wide price disparity of all polymers in 2008

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