Factors Determining the Level of Demand for Additives

The demand for additives naturally reflects the demand for plastics. Demand for plastics depends in turn on the sale of manufactured goods such as construction products, vehicles, domestic appliances, business machines, televisions, packaging, toys, shoes etc. There are also secondary factors promoting an increased usage of additives in every tonne of polymer. 

It is possible for additive suppliers with relatively novel products to sell more product each year even when plastics sales are level, by persuading customers that it reduces process costs, improves end-product quality or achieves better comphance with regulations. The additives business is one where technical excellence creates new markets. Special factors such as new fire regulations increase sales of flame retardants. Increased use of agricultural film favours greater use of stabilisers. Changes in social habits (such as increased consumption of ready-to-eat meals or bottled mineral water) also stimulate additive sales. 

At present, the main driver for additive sales growth seems likely to be the continuing industrialisation and increasing prosperity of populous developing countries, especially China, India and Mexico, as well as in South America and, to a lesser extent. Eastern Europe and Russia. 

Some additives are closely tied to specific polymers. Heat stabilisers are targeted exclusively at PVC, and it is sales of PVC rather than overall plastics sales that matter to the heat stabiliser supplier. Increased sales of polypropylene do not compensate at all. Plasticisers are almost as dependent on PVC as heat stabilisers. 

So Europe is one of the slow growth regions. Germany, home to Europe s largest plastics processing industry, saw its processing sector grow by 3.5% in 2003, but its polymer producers reported lower sales for the third successive year. 

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