Companies in the plastics industry are cautiously optimistic about the future

The exploding prices of raw materials and the shortage of materials due to the chaos in logistics are of great concern.

03-Aug-2021 - Germany

The plastics industry has recovered from the consequences of the pandemic faster than originally hoped. Companies expect this positive trend to continue. But the mood in the industry is clouded, because: Exploding raw material prices, dramatic material shortages as well as supply bottlenecks due to brittle logistics chains are putting companies under tremendous pressure.

This is the conclusion of the "41st KI Dialog", the latest survey on the economic situation in the plastics industry conducted by the business information service "KI - Kunststoff Information" in July 2021. Since 2001, KI has been surveying managers in the plastics industry every six months on topics such as business development and expectations, investments and employment. This makes the "KI Dialog" probably the oldest "economic barometer" of the plastics industry and provides the most informative mood picture of this important economic segment. 491 companies took part in the current survey.

The vehemence with which the economy has picked up again this year after months of standstill due to the pandemic is shown by the companies' answers to the question of how they assess their business development in the first half of 2021 compared to the last six months of 2020. More than two thirds of the companies believe that their business has developed positively - and only one in ten complains about a deterioration.

Particularly positive: the companies involved in recycling. They are almost unanimously (95 percent) pleased about an improvement in their business development. No wonder: the topic of sustainability and recyclates is currently dominating the discussion both in the industry and among the wider public. More and more brand manufacturers and buyers of plastic products are demanding that their suppliers make greater use of recyclates, and waste disposal service providers are also experiencing a boom.

Asked about their expectations for business performance in the second half of 2021, companies are cautiously optimistic, with one in three expecting to do more business in the next six months than in the past six months. Around half believe that business would remain at the same level, and only one in seven respondents expects the situation to deteriorate.

Companies are very concerned about raw material prices and the general shortage of materials, not least because of the chaotic situation in logistics. One of the reasons for the supply crisis is the massive number of force majeure notifications from raw material suppliers. Hardly a week goes by without a chemical company reporting an unplanned shutdown of its production. Nine out of ten respondents to the "KI Dialog" have meanwhile gained painful experience with the issue of precursors and delivery reliability. The completely broken global supply chains and the chaos in container shipping are doing their bit to cause raw material prices to explode.

No rapid improvement is in sight. Half of those surveyed do not expect the situation to ease until next year at the earliest. And just under one in ten companies dare not make any forecast at all, stating that the normalization of the situation is "unforeseeable". The consequence: more and more companies want to change their suppliers or are at least planning to expand their supplier network in order to reduce their "cluster risk" in the supply of materials.

Note: This article has been translated using a computer system without human intervention. LUMITOS offers these automatic translations to present a wider range of current news. Since this article has been translated with automatic translation, it is possible that it contains errors in vocabulary, syntax or grammar. The original article in German can be found here.

https://www.chemeurope.com/en/news/1172171/companies-in-the-plastics-industry-are-cautiously-optimistic-about-the-future.html