2022 is a critical year in the polymer industry at all levels. The global polymers market size is expected to grow finally after the economic recovery from the pandemic, but the fortune favors the wind, as the war between Russia and Ukraine changed everything, which affects all the raw materials prices.
In this article, we will connect the dots to know how the global plastic market will be affected by the new events, how the resin product prices change by the new factors in this dynamic market, and how the polymers price volatility will affect the supply and demand movement over the short and the long term.
Let us start with market updates in 2022:
1. Polymer Industry Updates In 2022
According to the latest updates from Plastics Today, the post-Covid economic recovery is keeping its robust momentum engendering healthy demand growth for plastics resin (estimated at 5% in 2022).
The resin producers have learned a precious lesson during 2021, that the resin prices will continue to rise at a reasonable rate unless the demand destruction is hit by surprise circumstances such as the pandemic.
Due to the pandemic, the resin and raw materials have reached record highs and recorded an increase of roughly 30%, as the raw material production plants, fabrication facilities, and logistics supply chain shut down or operated at a highly reduced capacity.
The United Nations conference on trade and development remarked that if those high rates remain elevated through 2023, the global import price levels could rise by 10.6%, which can affect the islands that rely on imports that arrive by sea, and this also affects the final price of low-value-added products, and the final prices of products such as computers will be affected by these higher rates.
The producers will aim to have a balance between the supply and the demand after ensuring that the global plastic market can accept rising prices.
When it comes to the workforce, the statistics ensure that the next 10 years will be between the ages of 25 and 45, because plastic companies witnessed a high number of orders, due to the growing demand for healthcare products during the pandemic.
In 2022 the resin and materials production will continue at a higher rate, the product output will increase approximately 1.8 %, and Mold production is expected to rise 3.4%.
2. Latest Plastic Industry News
When it comes to the most important latest news, no sound is louder than that of the battle between Russia and Ukraine, and If you want to know the real effect of the Russia-Ukraine war on the plastic industry, you should consider these critical points:
- Russia was the largest supplier of natural gas and oil to the European Union, and it is the largest exporter of energy, natural gas, and hard coal.
- Statistics suggest that Russia exports around 2.4 million polymers tons per year, which is a big volume.
- Ukraine is a huge provider of chemical products, raw materials, and machinery such as transportation equipment.
- Ukraine’s currency began to go down which will increase the cost of their exports.
Now let us see the war effect on the plastic industry:
- According to CNBC, Oil prices hit their highest level for more than seven years, and crude oil prices represent an increase of more than 20% this year.
- The average annual price Brent crude oil jumped to 100.3 U.S. dollars per barrel. This increase represents 30 U.S. dollars higher than 2021 annual average.
- War can increase supply chain disruption, which would not heal yet from the pandemic.
- The manufacturers have a strong fear of harm, as there might be a shift in demand from plastic to other raw materials because of the lack of confidence that the consumers have.
- If the war leads to further market distortions from the Russian side, the market will look toward Emirates, Kuwait, and Saudi Arabia, as one region’s loss may well become another locale’s gain.
The second most important news is that the U.S. pact published its unnecessary packaging material list, at the beginning of that year, which includes the products that are not recyclable, compostable, or reusable, and at scale, by 2025 these products are not projected to be in practice.
This list that was released by the U.S. pact that comprises more than 100 business such as packaging companies and material supplies include these 11 problematic products that should be eliminated because they cannot be reused, recycled, or even turned into compost:
PVC\ PS\ PETG\ PFAS\ Non-detectable pigments\ labels material.
Pigmented PET\ Stirrers\ Straws\ Cutlery\ oxo-degradable additives.
This list is confined to packaging materials, not including necessary medical plastics that are used in hospitals and clinics.
The ACC (American Chemistry Council) Vice President of plastics Joshua Baca remarked that drawing this list will increase food waste and promote the use of many materials with a higher carbon footprint than plastics.
Gap polymers experts claim that there would be a solution to increase the recyclability of the products. They suggest adding additives and developing innovative compounds that can make even PVC, PETG, PS, and other grades recyclable
3.Product Updates in the Plastic Market
This year witnessed a strong demand for propylene, and polypropylene supply has delayed matching the market demand, especially in western Europe and North America.
As a result, the race between propylene supply and demand will continue in 2022, because demand will continue to grow more quickly than supply, and for the next 4:5 years the global propylene demand is expected to continue.
The most important update about plastic products is that the polypropylene supply has been impacted by the covid 19 pandemic more than other petrochemicals due to diesel and gasoline markets.
But contrary to expectations. PE prices were steady at the beginning of 2022 and prices advanced ahead of March. HDPE prices didn't change, LDPE Prices declined and LLDPE witnessed increase of prices as of 25th of April.
According to recent research:
4. The future of the plastic industry GAP Polymers In 2022
The future is already here in GAP polymers, as we aim to sell 1 million tons of polymer material globally by 2030 while being the top distributor in Africa.
We have been successfully developing our 6 branches, and in 2022 we are expanding in new plastic markets such as North Africa.
We are also looking forward to supplying our customers with new products such as recycled plastic.
“GAP Polymers” also wants to enhance the relationship with our customers to be a long-lasting relationship by laying our valuable fundamentals such as integrity in business, providing quality in the supply process, flexibility, teamwork to ensure that our customers are highly satisfied.
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