Polymer Demand in NAFTA is AMI’s most recent addition to the Polymer Demand series, providing a comprehensive analysis of the polymer markets across the United States, Canada and Mexico.
The report covers the third-largest regional polymer market in the world and includes the world’s second-largest economy in terms of purchasing power parity. Home to some of the industry’s leading polymer producers with pioneering production capabilities, the technological prowess in the US has enabled development across the entire plastics supply chain. The recent developments in shale gas extraction have stimulated the polymer market in NAFTA through provision of cheap polymer feedstock and facilitating an increase in domestic manufacturing productivity by virtue of low energy and operation costs. A 58 percent increase in natural gas extraction is forecast between 2017 and 2040, which suggests that the US will have a raw material and electric power cost base that is on a par with that in the Middle East.
In the context of the growing degree of globalization, market maturity, elevated environmental awareness and success in the automotive industry combined with a growing penetration of plastic in flexible packaging and a resurgence in construction activity, the plastics industry has been enabled to prosper in the North American market. Polyethylene, in particular linear low-density grades, have been spearheading the rise in film demand for flexible consumer and industrial packaging.
The emerging economy of Mexico has played an important role in driving the plastics industry forward and has witnessed growth above that of the regional average. A growing middle class with more expendable income, a large export economy that competes at a global level and legislative reforms geared toward developing the Mexican economy have been instrumental in the nation’s polymer demand increase above 3 percent per year in the five years leading up to 2017.
The automotive industry is showing signs of maturity with 2017 seeing the first year since 2009 that US output did not grow. However, the automotive industry continues to attract investment, and Mexican production has remained strong. Opportunities for plastics to penetrate the automotive industry remain with incorporation of such features as built-in GPS units, onboard computers and cameras, as well as improved material grades that facilitate lightweighting.
The ongoing NAFTA negotiations cast a degree of uncertainty on multiple industries as trade tariffs may come into effect, therefore affecting the supply chain. However, efforts are being made to support general development across the region through protectionist policies and fiscal stimulus, which is expected to catalyze growth in the plastics industry.
Overall growth of the North American polymer market is forecast to be 2.7 percent per year through to 2022, with a moderate variation between the slowest growing market of Canada and the fastest growing of Mexico.
AMI was founded in Bristol, England, in 1986 as Applied Market Information Ltd. by a group of expert consultants who had decades of experience conducting market research, compiling data reports and providing intelligence to the global plastics industry. For more information about this report, contact Fergus Mooney at [email protected]. To learn more about AMI, visit www.ami.international.