January means we need to look ahead at what’s coming and stop focusing on the mess we have been through. It is a time to look forward to celebrating large and small victories.
What’s ahead for the plastics industry? Here are a few things to think about.
THE U.S. ECONOMY is going to get better, but probably at a much slower rate than we would hope. Consumers are still buying plenty of products made with or packaged in plastics. Overall consumer spending is on a slow, upward climb. Inflation has not reversed real personal consumption expenditures.
Plastics processors that depend on the automotive industry won’t get much relief this year. While gasoline prices are down and there is a significant pent-up demand for new cars, the semiconductor shortage will hold back automobile and truck production.
Auto makers also are grappling with the switch to electric powered cars and trucks. The change is being driven by government mandates, but expect to see increasing interest in electric-powered vehicles from consumers and fleet operators this year.
The switch to electric propulsion is good for the plastics industry. It showcases our material’s strength, light weight and superior design capabilities. There will be some growing pains as new processing programs replace legacy ones, but in the end, plastics production should be better.
CRITICS WILL GET LOUDER and call for more restraints on plastics production this year. Pictures of sea turtles tangled in plastics six-pack rings, which gave way to stories about people unknowingly ingesting tiny plastic particles, will be replaced by some other anti-plastics headline.
Plastics Industry Association President Matt Seaholm has been aggressive in refuting anti-plastic campaigns, and I predict he will have plenty to push back against this year. Support him anytime you have an opportunity to do so.
RECYCLING IS HAVING A MOMENT, but the country still lacks the will to create an infrastructure that collects most waste plastics and recycles it in ways that it can be re-used in quality products. I doubt that will change much this year.
Recycling technology is racing ahead, and the machinery industry is solidly behind developing equipment that can process recycled material. Recycling equipment took center stage at K 2022.
I was once skeptical about advanced recycling – a term that generally refers to chemical recycling – but massive recent investment by virgin resin manufacturers in advanced recycling plants is changing my opinion. In a short time, there will be significant capacity coming online.
This can be a game-changer in the sense that the plastic molecule that has been chemically recycled is interchangeable with a virgin molecule.
Advanced recycling could begin to make an impact in 2023 or soon after. But we still have not solved the problems of collection and sorting.
Will advanced recycling help lower the anti-plastics rhetoric? Probably not much.
WILL EUROPE’S PROBLEMS DRAG US DOWN? The European plastics industry is starting this year facing horrific problems. On top of the COVID-era stumbling blocks, energy prices doubled in 2022 as a result of the war in Ukraine.
Some plastics processors in Europe are unable to cope with the additional costs and are shutting down production lines or closing plants.
What about closer to home? Our annual buying survey found that 87 percent of processors in North America think their business will be better or about the same in 2023 as it was in 2022. That’s a pretty high number considering the headwinds experienced last year and expected this year.
But the plastics industry is global even if all your customers are all in the U.S. Most plastics processing and recycling machinery is made outside the U.S. Many of the customers you depend on in the U.S. sell their products overseas. A recession in Europe is painful for your customers and your suppliers.
It is a big question how Europe’s woes will impact the domestic plastics industry.
WHO WILL BE THE WINNERS AND LOSERS? I am going to go out on a limb here. I expect processors that rely heavily on the auto industry will face a slow year. I expect packaging manufacturers will suffer from increased anti-plastics scrutiny and legislation, particularly those that make single-use plastic products.
Winners? Processors that have customers in a broad range of industries. Processors that are proactive and imaginative in finding, training and retaining workers. Processors that continue to invest in new equipment that make their plant more productive.
Check back in a year to see how I did.
Ron Shinn, editor
