Wednesday, January 28, 2015

US Flexible Plastic Packaging Sales

US flexible plastic packaging sales in the 2011 to 2013 time frame was in the $18 billion to $20 billion range, based on a review of data on the Internet.   Historically, packaging sales growth from year to year follows retail sales growth.  However, it is likely that flexible plastic packaging sales growth will exceed the historical rates.  Some of the reasons for this are:

1.  Customer Acceptance.  Flexible plastic packaging allows for advances by packagers in design, open-ability, reseal-ability, size, package messaging, and other features which have great appeal to customers.

2.  Better Performing Plastics.  Technical developments are allowing packagers to use better performing plastics in flexible plastic packaging that provide greater shelf-life, lower weight, and other desirable properties.

3.  Active Packaging.  Technical developments are now allowing packages to be “active” in that packaging materials can do such things as absorb oxygen, water, and other undesirable chemicals and be antimicrobial.

4.  Intelligence Packaging.  As in 2 and 3 above, technical developments are allowing packagers to insert sensors, communication signals, safety-related devices, and other desirable “intelligence” systems into the packaging.

Because of the above reasons, flexible plastic packages should provide many increased benefits to the seller and the buyer of products in flexible plastic packaging.  These increased benefits should lead to better sales growth than for other packaging.

Tuesday, January 20, 2015

Some Cost Data Related to US Chemical Shipments

The Internet was searched for truck, rail, and barge costs data related to chemical shipments in the United States.

Data was found that suggests that approximately $46 billion was spent by chemical companies in the US to ship their products in 2013.  This represents a shipping cost to revenue ratio of about 6% (total chemical sales in 2013 believed to be about $812 billion).  Reducing this ratio by 1% could save approximately $5 billion.

Data found suggests that the cost per ton mile for shipping by truck in 2013 was in the $0.30 to $0.35 range.  And, shipping by rail was in the $0.06 to $0.07 range.  Assuming this data is approximately correct, truck shipments were about 5 times more expensive than rail shipments in 2013.

Although truck shipments were more expensive, 2013 data suggests that about 68% of all chemical shipments were by truck, 22% by rail, and most of the rest by barge.  Truck shipping allows for greater flexibility, smaller shipments, and more on-time deliveries.

Thursday, January 8, 2015

Some Estimates for Recycled PET Sales

Based on data found on the Internet, in 2013 approximately 9 million MT (metric tons) of PET (polyethylene terephthalate) polyester was produced globally.   (Most PET produced was used to make bottles.)

Also Internet data suggests that approximately 30% of produced PET bottles are recycled into producing “recycled” PET.  And, that recent market prices paid for the used PET bottles were $400 to $550 per MT for mixed-colored PET bottles and $630 to $800 for colorless PET bottles.

Recent sales prices for recycled PET from these recycled PET bottles ranged from $900 to $1,040 per MT for PET produced from mixed-colored bottles and from $1,200 to $1,350 per MT for the recycled PET produced from colorless bottles.

So, assuming that 2.7 million MT (0.30 % X 9 million MT) of colorless PET bottles were recycled (assuming only colorless bottles were recycled), recent recycled PET had an approximate average $3.5 billion market sales value (2.7 million MT X ($1,200/MT + $1,350/MT)/2)) (if all recycled PET was from colorless bottles, which was not the case).

If all the bottles were of mixed color, this average market sales value would be approximately $2.6 billion (2.7 million MT X ($900/MT + $1,040/MT)/2)).

Since the used recycled PET bottles were neither all colorless nor all colored, and the distribution of each category cannot be determined, I conclude that the recent market sales value of recycled PET from used PET bottles is in the $2.6 to $3.5 billion range.

Because the average prices paid for the used PET bottles that were recycled into PET are approximately known, the average costs of these used bottles can be estimated.  And, using this estimation, an average gross profit margin percentage range for recycled PET can be calculated.

Please email me, if you are interested in more details on the above.

Tuesday, January 6, 2015

Some Conclusions from Polyamides Sales Data

Uses for polyamides include: in textiles; in carpets; as engineering plastics; as ropes; in food packaging films; in sporting equipment; in 3-D printing; as electrical insulation; and as cable covering.

In the 2012-2013 time frame, according to marketing sales reports, global polyamide sales for all uses came to about $22 billion.  And, about 45% of these sales were in the European Union; 25% in NAFTA countries; 25% in Asian countries, with 5% in the rest of the world. 

With an estimated 500 million people and 45% of the $22 billion polyamide global sales, the European Union had about $20 of polyamide sales per person in 2013 (0.45 X $22 billion polyamide sales/500 million people).  In NAFTA, the per person polyamide sales was about 40% less at about $12 per person (0.25 X $22 billon polyamide sales/444 million people).  Assuming Asia’s population at 4.4 billion, the per person polyamide sales is at about $1 per person (0.25 X $22 billion polyamide sales/4.4 billion people).  And, per person sales for the rest of the world would be about the same as for Asia (0.05 X 22 billion polyamide sales/1.6 billion people).

This regional per person polyamides sales data suggests an enormous potential for polyamide sales in Asia and in emerging economies as their economies mature.  For example, in Asia, assuming a 4.4 billion population, if the per person polyamide sales in 2013 was $5 instead of $1 per person, annual sales would have increased by about $18 billion ($5 per person X 4.4 billion people less $1 per person X 4.4 billion people).

My guess is that for many of the uses of polyamides, substitution products are not likely to take away substantial sales of the polyamide products.  So, if European Union per person polyamide sales represent a potential per person Asian sales in polyamides, it is not surprising that chemical companies continue to maintain and invest in their polyamide production and technology.

Friday, January 2, 2015

Chemical and Material Shortage Alert – December 2014

The purpose of this blog is to identify chemical and material shortages reported on the Internet.  The sources of the information reported here are primarily news releases issued on the Internet.  The issue period of the news releases is December 2014.

Section I below lists those chemicals and materials that were on the previous Chemical and Material Shortage Alert list and continue to have news releases indicating they are in short supply. Click here to read the November 2014 Chemical and Material Shortage Alert list.

Section II lists the new chemicals and materials (not on the November alert).  Also provided is some explanation for the shortage and geographical information.  This blog attempts to list only actual shortage situations – those shortages that are being experienced during the period covered by the news releases.   Chemicals and materials identified in news releases as only being in danger of being in short supply status are not listed.

Section I.   Chemicals and materials that continue from November to be reported as in short supply are: none

Section II.   Shortages Reported in December not found on the Previous Month’s List

Iron ore:  India; government regulations
Nickel:  global; government regulations
Polyetherimide (PEI) resin:  global; production not keeping up with demand
Propylene: global; production not keeping up with demand
Urea:  India; government regulations

Reasons for Section II shortages can be broadly categorized as: 

1.  Mining not keeping up with demand: none
2.  Production not keeping up with demand: polyetherimide (PEI) resin; propylene
3.  Government regulations: urea; iron ore; nickel
4.  Sources no longer available:  none
5.  Insufficient imports:  none

6.  Supply not keeping up with demand:  none