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Plastics and rubber - Industry Overview
US Industrial Outlook, Annual, 1994 by Raimundo M. Prat
Before reading this chapter, please see "Getting the Most Out of Outlook '94", on page 1. It will answer questions you may have concerning data collection procedures, forecasting methodology, and chapter references. For additional information concerning this topic, see chapter 5 (Construction), 7 (Construction Materials), 11 (Chemicals and Allied Products), and 35 (Motor Vehicles and Parts). This chapter covers prospects for both plastic and synthetic rubber materials, as well as products made from these materials.
PLASTIC MATERIALS
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This category (SIC 2821) groups together various petroleum-derived monomeric and polymeric materials, whether used singly or in combination, to make a wide variety of molded plastic shapes. Production of plastics follows a well-defined sequence: three primary materials (petroleum, natural gas, and coal) are broken down by refining and fractionation processes into various light-to-heavy petrochemical feedstocks. These materials, also known as light, middle, and heavy oils, are then reacted with others to make more complex intermediates. These can be further reacted with accelerating agents to yield low molecular weight monomers and the heavier, more complex polymers.
General purpose, or commodity thermoplastics are usually manufactured in large quantities using well established technology. The bulk of total general purpose plastic goes to a relatively small number of large volume users. Among the general purpose materials are the simpler monomers, such as the polyethylenes, polystyrenes, and polyvinyls.
In contrast, specialty plastics are specifically developed to meet extreme environmental conditions and involve significant up-front research and development costs. These highly resistant materials are often produced on a customized basis to address the needs of individualized end uses. Typical specialty resins are the cellulosics, the polycarbonates, and the polyetheretherketones.
The final end use often determines how a given material may be classified. Thermoplastics differ from thermosets in that the former can be reheated and remolded repeatedly, while thermosets can be heated and molded to a final shape only one time. About three-quarters of total U.S. production of plastic materials covered by SIC 2821 is thermoplastics.
Total output of U.S. plastic materials producers in 1992 reached an estimated 66.6 billion pounds. Profit margins that had eroded in 1990 and 1991 were partially offset in 1992 as prices stabilized. In volume terms, demand in 1992 was highest for the low- and high-density polyethylenes, polypropylene, polyvinyl chloride, polystyrene, and acrylonitrile butadiene styrene. The fastest growing market segments in 1992, however, were the engineering resins, high-density polyethylene, polyvinyl chloride, and the polyolefins.
[TABULAR DATA OMITTED]
INTERNATIONAL COMPETITIVENESS
The United States remains a major net exporter of plastics to the world. Trade with Canada and Mexico accounted for about one-third of total U.S. exports in 1992, followed by the Netherlands, Belgium, Japan, Hong Kong, and Taiwan.
Chronic worldwide overcapacity, particularly in Europe and Japan, however, continues to depress long-term prospects across most product areas. Plant closures and capacity cutbacks have been partially successful in preventing further price declines. Joint ventures between high volume firms have become more frequent as producers see the advantages of pooling resources to prosper in a sagging market.
Outlook for 1994
Constant dollar shipments of plastics will remain strong, exceeding an estimated 6 percent growth in 1994. Demand from certain end-use sectors, including packaging, medical devices, and automobiles, is expected to grow faster than the industry average.
Long-Term Prospects
Material substitution (e.g., plastic for metal, wood, or glass) as a major growth factor is expected to slow down considerably, reflecting the already high level of substitution of plastic now evident in areas once reserved for more traditional materials. However, new applications are emerging. These will place greater demand on convenience and safety features and are likely to generate interest in newer general purpose materials. The cost, low weight, and versatility advantages of newer plastic materials will also make them more attractive in the auto assembly industries. The demand for recycled and biodegradable materials is expected to continue, as well as drive development of more economical recycling technologies.
PLASTIC PRODUCTS
This section (SIC 308) summarizes developments for seven of nine industries. These include SIC 3081 (Unsupported Plastics Film and Sheet), SIC 3082 (Unsupported Plastics Profiles, Rods, Tubes, and other Shapes), SIC 3083 (Laminated Plastics Plate, Sheet, Profiles, Rods, and Tubes), SIC 3084 (Plastic Pipe), SIC 3086 (Plastic Foam Products), SIC 3087 (Custom Compounding of Purchased Plastic Resins), SIC 3089 (Miscellaneous Plastic Products, not elsewhere classified).
