According to a recent study by Applied Market Information (AMI Consulting), shale gas development in the US will significantly impact both the growth of polyethylene (PE) film usage and the level of global trade in finished film.
The study says this will lead to major reduction in the cost of PE resin in addition to reducing the energy cost of subsequent film production - adding: "It is highly probable that North America will have a polymer cost base on a par with that in the Middle East, leading to PE film exports from North America overtaking those of the Middle East".
Looking beyond 2018, this projected cost advantage, "combined with the technological expertise of US PE film producers, will ensure North American PE film producers become truly global players".
In 2013, according to AMI, Northeast Asia (including China) was the highest producer region, with one third of global production of PE film, followed by NAFTA with a 17 per cent share and Western Europe accounting for 15 per cent of global production. By 2018 it is forecast that Northeast Asia will have increased market share of global production to more than 35 per cent, while NAFTA's share will remain unchanged and Western Europe's share will fall significantly, largely as a result of continuing economic difficulties in some of the member states combined with high costs of raw materials, energy, labour and freight.
The study says Western Europe will continue to grow in terms of tonnage "only because it remains one of the cradles of technical development of PE films (the other being NAFTA), and continued success will depend on a shift of business towards higher added value film products".
Looking at market applications, the highest growth rate is forecast for stretch films due to increased usage in less well-developed countries as the proportion of sales through large retail outlets increases. Demand for bags and sacks is also forecast to grow appreciably, as is growth of technical films, agricultural films, heavy duty sacks and shrink films
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