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Category: News Business Environment
'New era for plastics market'.
'The import flows for plastics that had been anticipated for end 2009 will resume for Europe sometime in 2010, though in smaller volumes than we had become accustomed to; still, they are coming.' This is what Jos Müller, Commercial Director with VSL SiloLogistics, deducts from everything he has been hearing and observing over the past weeks and months in meetings with customers and through other channels. 'Even though the primary-product flow is partly shifting to the Far East, a substantial segment remains for Europe. The forecast is that the current +/- 26 million tons of European capacity will diminish by some 4 million tons of capacity. With developments so rapid though, this might easily be either more or less. Fact is that factories will be hit, but which ones and where, remains to be seen ...'
'Another trend is parties maintaining extremely low stock levels. This demands even more flexibility from logistics chains, a must to survive in this commodities market. And we see Europe focusing on specialties, high-tech plastics such as compounds, etc.. This is set to replace primary products, i.e. commodities, which will increasingly be sourced from outside Europe. This will bring many changes to our region in terms of operating procedures based on relatively constant flows and costs. These changes will have an immediate impact on the required modes of distribution (transport) and storage. 'Clients demand 100% availability of capacity, even if quantities and locations vary greatly per year, month or even week.'
'Our clients too are experiencing the consequences of this new dynamic, with for instance identical volumes being sold but to totally different customers than in the immediately preceding period. Minimum stock levels, shorter periods, an outlook of months instead of years: this appears to be the trend', thus Jos Müller. 'Another consequence is that it gets more difficult to make forecasts. Where will the plastics be sourced, and who will be the suppliers: the budget or the ‘more expensive' high service supplier? And consequently: where will it enter Europe or who will be the local European producer, when will delivery be made and in what volume? Huge challenges in this new era for the plastics market!'
February 2010