Film & sheet poised for growth.* After declining 6% in 2005 and another 2% in 2006, North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. production of plastic film will increase 4% in 2007. Our forecast will put this year's output very near the peak that was posted in 2004. We are also forecasting a 4%, gain in our Sheet Business Index in 2007. This follows two years of flat output of plastics sheet. Film cycle turns upward As the accompanying chart illustrates, a distinct cyclical cyclical Of or relating to a variable, such as housing starts, car sales, or the price of a certain stock, that is subject to regular or irregular up-and-down movements. pattern has prevailed in our Film Business Index over the past 10 years. That cycle is best described as uptrends in production that last two to three years alternating with declines that last for a year or so. It is unusual for the downtrend downtrend A series of price declines in a security or the general market. Many analysts feel that investors should avoid securities in a downtrend until the pattern is broken. Compare uptrend. to last as long as two years (as it did in 2005 and 2006), but the good news is that the latest downtrend was turning upward as 2007 started. Market and economic factors point to continued improvement. First, resin prices have recently trended lower, and should stay lower on average in 2007 than they were in 2006. Resin prices correlate closely with oil and natural gas prices, so there is always some upside risk, but current fundamentals indicate that these commodities will trend lower in the near term. Second, film producers continue to benefit from technical advances in processing and in the quality of film resins. This means that film products keep growing less expensive to manufacture and are increasingly being used in more sophisticated applications. These trends in films are driven primarily by growth in retail sales and also by the trend in profits for critical end markets like the food industry. The news is quite good for both of these drivers. Total retail sales (excluding autos), expanded by a solid 7% in 2006 and similar growth rate is expected in 2007. Food industry profits jumped 9% in 2006 but will decelerate de·cel·er·ate v. de·cel·er·at·ed, de·cel·er·at·ing, de·cel·er·ates v.tr. 1. To decrease the velocity of. 2. to 5% in 2007, but this is still strong enough to push increased development of new film packaging products for food and beverages F&B is a common abbreviation in the United States and Commonwealth countries, including Hong Kong. F&B is typically the widely accepted abbreviation for "Food and Beverage," which is the sector/industry that specializes in the conceptualization, the making of, and delivery of foods. . Sheet The sheet market is much smaller than that for film, but growth has been faster during the past 10 years. By far the strongest segment of this market has been polypropylene polypropylene (pŏl'ēprō`pəlēn), plastic noted for its light weight, being less dense than water; it is a polymer of propylene. It resists moisture, oils, and solvents. sheet for non-packaging applications. [GRAPHIC OMITTED] By Bill Wood Plastics Market Economist Bill Wood, an independent economist specializing in the plastics industry, heads up Mountaintop moun·tain·top n. The summit of a mountain. Economics & Research, Inc. in Greenfield, Mass. He can be contacted by e-mail at BillWood@PlasticsEconomics.com. His monthly Injection Molding injection molding n. A manufacturing process for forming objects, as of plastic or metal, by heating the molding material to a fluid state and injecting it into a mold. and Extrusion Business Indexes are available at www.ptonline.com. |
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion