The European plastics industry has had a difficult year. With demand falling sharply in many markets, industry players’ earnings have come under pressure from the resulting drop in sales. Companies have responded with rigorous cost-cutting measures, focused particularly on Germany due to its high energy and production costs.

Internationally operating plastics converters such as Autoliv, Plastic Omnium, Deceuninck and Pipelife, and recycling companies like Veolia shut down sites in Germany or announced their intention to do so. Automotive suppliers Ditter, Kamei, and Philippine Technische Teile were particularly affected in the country.

Plastics producers were similarly affected by the collapse in demand. European plants frequently operated at minimum capacity and some capacity that was already unable to compete with Asian and North American suppliers was taken off the market altogether. Trinseo shut down a PC line in Stade, for instance, and announced the closure of its styrene production in Terneuzen, Belgium. LyondellBasell intends to discontinue PP production in Brindisi, Italy, at the end of the year, and the JBF PET plant in Geel, Belgium, is also on the brink of closure. At the same time, Ineos announced the definitive end of its already dormant PTA production in Geel. Celanese plans to close its PA 6.6 polymerisation facility in Hamm-Uentrop.

Developments on the market also fuelled companies’ M&A ambitions, however. This is particularly evident in the case of the Arab state-owned Adnoc group which has set its sights on the two plastics producers, Covestro and Braskem. The takeover battle for Finnish pipe manufacturer Uponor caused a stir among converters, with Georg Fischer ultimately beating its Belgian co-bidder Aliaxis.

Polymer production in Europe is under pressure – both from energy prices and low demand at home and from a flood of cheap imports coming in from abroad. Never has there been a year with so much talk about the “dramatic disadvantages of Germany as a location” (Ralf Düssel, president of Plastics Europe Deutschland) or the “de-industrialisation of Europe” (Markus Steilemann, president of the German chemical industry association VCI). The politically desired use of recycled materials, driven by the introduction of quotas, was countered last year by cheap imports of virgin material, primarily from Asia. The price of these imports fell by up to 50% in less than 12 months.

The only ones in a position to benefit from this weakness of small and medium-sized companies are the producers who, on their side of the table, are frantically endeavouring to implement the upcoming recycling requirements by buying up any recyclers and compounders they can lay their hands on.  

Europe is now attempting to counter this – in the case of base polymers at least – with an increasing number of trade sanctions in the form of anti-dumping procedures and punitive duties. Prime examples this year include PET and PVC where the situation has become critical. Plant curtailments right down to the pain threshold for PVC and shutdowns for PET are still the order of the day. Scarcely any improvement is in sight for 2024. On the contrary, large-scale cheap imports from the USA and Asia will step up the pressure still further – with volumes expected to double for PET. 

Not only in Europe is the industry having to draw on its reserves. Producers on the other side of the Atlantic are also facing increasing difficulties, albeit for a different reason. Stricter environmental legislation is setting out to make life more difficult there. It should come as no surprise that the industry is putting up resistance, with the tone having become much harsher of late, dividing the country into two camps once more. And this is without taking into account US President Joe Biden’s statement at the start of the year that, in 20 years’ time, he wants to see only bio-based plastics.

Plastics packaging manufacturers have also suffered from the weak demand this year. Difficult day-to-day business is one aspect of the situation and sustainability transformation the other. The latter constitutes an even greater challenge for packaging manufacturers. The flood of regulatory requirements in Europe has resulted in increasing uncertainty in Europe in 2023 – in Germany due to the amendment of the Packaging Act (VerpackG) and in Spain on account of the plastic tax.

The most notable of these is the EU Packaging Waste Regulation (PPWR) which is currently still under negotiation at EU level and is expected to be adopted midway through 2024. If the specifications contained in the draft come into force, this will have a far-reaching impact on the European packaging landscape. Among other things, the fundamental requirements on packaging will be tightened so as to ensure that packaging can be reused and recycled. The recyclate content is also set to increase and strict “bans” on critical substances in food-contact packaging are additionally on the cards.

Plasteurope.com has decided to end the year on a slightly different note. Instead of taking you, dear reader, to another website with our picks of the year, we've decided to make things easier and brought everything under the common roof of the Plasteurope.com website and magazine. From automotive over marcoeconomics to the impact of the Ukraine War, we're bringing you an analysis of the year that was, with hints of what you could look forward to in 2024. Our goal, simple as always, is to help you make better business decisions. Hope you enjoy reading our Year-Enders 2023!