FILM EXTRUSION INDUSTRY RESTRUCTURING DRIVES CHANGES IN POLYETHYLENE USAGE
AMI, Bristol, 12^th March 2007 – In recent years the North American polyethylene film industry has ridden a rollercoaster of fluctuating demand, volatile resin pricing and sustained attack from imported finished film products. As a result companies have been fundamentally reassessing where their business should be focused in terms of applications and customers resulting in extensive restructuring and reorganizing within the film extrusion sector. The way these changes are affecting the use and demand of polyethylene materials has been extensively analyzed in a new report from AMI Consulting.

The North American film industry consumed over 13.7 billion lbs (6.2 million tonnes) of polyethylene in 2006. The leading feedstock used is linear PE (LLDPE), with C6 (hexene) varieties the most common accounting for over a quarter of the market in 2006. It has achieved a high level of penetration thanks to its balance of price versus performance, being cheaper than C8 (octene) grades but offering better performance than the lower cost C4 (butene) grades. C8 suppliers have also been encouraging film extruders to move to C6. It is rare to find any film application which does not contain LLDPE in the construction. The increasing investment in new equipment and co extrusion capability has increased the proportion of LLDPE which can be utilized by companies, with linear rich products now commonplace.

The use of LLDPE will continue to increase as companies are now highly familiar and comfortable using it and have the equipment which can run linear products both in pure and as blends. Much of this investment is being driven by the processors using a wide a resin slate as possible to protect against fluctuations in supply.

Recent years have also seen the commercialization of metallocene resins. Although processing issues remain, it is clear that metallocene resins are becoming more consistent (albeit slowly) and better understood within the processing industry. As a result consumption has advanced rapidly over the past five years and metallocenes are now routinely used in stretch film, food packaging, shipping sacks, liners and personal care items. For 2006 their use in film extrusion is estimated by AMI at just under 1 billion lbs (450,000 tonnes), accounting for 7% of all PE usage by the industry.

AMI’s report is a highly detailed analysis of where and how 10 different grades of polyethylene (including recyclate) are used in more than 50 different applications. Of these end use applications the main segments with significant growth will be unitization film, where the demand for both stretch film and stretch hoods will continue to advance as the supply chain calls for greater load stability and protection; security packaging where growth will be a consequence of the need to provide enhanced confidentiality and protection to sensitive products in transit; consumer products as consumers purchase more items in bulk and then use bags to break them down into more manageable portions; and medical packaging segment where greater protection is demanded of medical devices from infection.

In total the PE film industry in North America is forecast by AMI to grow at 2.6% per year to 2010 to make it a market consuming just over 15.3 billion lbs (nearly 7 million tonnes) of PE materials.

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Polyethylene film in North America is a highly detailed multiclient report from AMI Consulting. For further information and a proposal please contact Andrew Reynolds on +44 117 924 9442 e-mail: apr@amiplastics.com