A year ago, we speculated about the advice old man 2011 might have for baby 2012: “Keep your head down, kid” (see Plasteurope.com of 19.12.2011). That grown-up baby may now be giving the same advice to its successor as it bows out, battle-scarred and undoubtedly grateful that the New Year is limited to one term. How else to survive the gyrations of polymer markets, the capriciousness of the world economy, the volatility of raw materials prices and the breathlessness of the race to keep abreast of and comply with new political or environmental rules and regulations?

The dizzying roller coaster ride that petrochemicals and plastics prices have continued on for the past 12 months has been sufficient to give even the most robust riders an acute case of vertigo. The volatility of TiO₂ and aromatics was especially staggering. As they closed their books on 2012, plastics producers, converters, machinery manufacturers and the end markets were licking wounded margins and wondering whether newcomer 2013 would rub in more salt.

As December approached, plastics industry players in northwest Europe breathed a sigh of relief that a recession as severe as 2008-2009 had not reoccurred on their home turf, even if signs were increasing that two fat years could give way to two lean ones. The crisis-ridden eurozone looked like a stack of dominos ripe for collapse, sweeping away markets with them.

The most important events of 2012 at a glance ...

Companies doing business in southern Europe already knew that the recession had arrived, as long insolvent Greece was joined by Italy, Spain and Portugal needing a shot in the arm. Italy as a major plastics player appeared poised to drop off the map – see Plasteurope.com of 30.05.2012. In view of Ireland’s financial woes, the industry was secretly glad that the green isle on the periphery of the region is not a big plastics player.

The highly tuned automotive engine of demand had begun to sputter as 2012 waned. With European car output shrinking – see Plasteurope.com of 02.10.2012 and 30.08.2012 – OEM suppliers saw their life’s blood draining away. Producers and converters of EVA were already bending under the weight of the photovoltaics market collapse. The potential effect of the EU embargo on Iran in place since July – see Plasteurope.com of 10.08.2012 – was still mostly a question mark, although a rather large one.

The answers to some of the questions we asked a year ago are still open, others may have moved closer to being answered. Will the Middle East finally gain dominance of upstream plastics markets or will the sceptre pass to China? The jury appears to be still out.

While the Arabian Peninsula continued to see rapid growth in 2012, with many new projects in the pipeline – see Plasteurope.com of 18.07.2012 – as yet there were no signs of it overtaking Europe and North America. As for China, no one is dismissing its looming importance but the manifest growing pains of the vast country looked to as both a consumer and a competitor suggest that even in the People’s Republic all that glitters is not gold.

The most important events of 2012 at a glance ...

The advance of women into the boardroom did not gather much momentum this year, even if some companies, such as those in the German DAX index of blue-chip players, did pledge to voluntarily appoint more females to top positions, and EU commissioner Vivian Reding managed to push through a small portion of her equality agenda, at least as regards supervisory boards.

In many respects, it was business as usual in the European plastics industry in 2012. Companies were bought and sold, markets expanded and shrank. Oil and polymer notations surged and just as quickly plunged again. Polymer producers curbed output as converters protesting high prices staged an order boycott, and the trials of technology and pressure from the markets also compelled producers to declare force majeure.

Spectacular M&A transactions were few. The biggest deal worldwide was undoubtedly Eastman’s USD 4.7 bn takeover of fellow US specialty chemicals producer Solutia – see Plasteurope.com of 27.01.2012. In Europe, German plastics machinery maker KraussMaffei was sold to Canadian private equity investor Onex – see Plasteurope.com of 27.09.2012 – and German film and packaging manufacturer Nordenia was bought by South African packaging and paper group Mondi – see Plasteurope.com of 02.12.2012.

There also was a lot of activity among European plastic pipe producers. As part of Arkema’s exit from the vinyls chain, Alphacan became part of a new PVC group, Kem One. The restructuring efforts at Uponor are also far from over – this year, the Finnish group divested its German subsidiary Hewing. Belgium’s Solvay sold its 50% stake in its Pipelife joint venture to jv partner Wienerberger. But the most spectacular news in the sector this year probably was Mexichem’s takeover of Wavin. This latter move in particular shook up Europe’s PVC scene in 2012. The sector has seen its fair share of action of late, as the once rigid market has come increasingly in flux.

Another trend worth mentioning is the rise in medical activities among European injection moulders. The roots of this shift date back to the economic crisis, when the medical technology sector afforded a haven. By now, competitive pressure in this field, too, is on the rise.

Several phenomena proved to have staying power in 2012. The polymer production sector underwent further consolidation. Shale gas continued to capture the fantasy of big European chemical companies and UK politicians, while all of Poland seemed to be searching for drills. Bioplastics grew more and more mainstream. Bans on plastic bags continued to be discussed, and the debate over the health dangers of phthalates and bisphenol A showed no signs of disappearing.

The most important events of 2012 at a glance ...

Polymer production got off to a shaky start in 2012. In January, an explosion at LyondellBasell in Wesseling / Germany shut the plant and triggered an FM declaration. In early March, a glitch in the cooling circuit led Shell Chemicals to impose force majeure for cracker products from Moerdijk / The Netherlands. In late March, the death of two workers at Evonik’s Marl / Germany CDT plant – see Plasteurope.com of 01.04.2012 – cast a pall over the PA 12 market. In August, HDPE buyers faced almost simultaneous FM declarations from Total and Ineos in France.

Taking account of the gradual shift in dynamics away from Europe, polyolefins producers began to consolidate assets. Multinational Dow Chemical announced plans to close its 180,000 t/y HDPE production line at Tessenderlo / Belgium – see Plasteurope.com of 05.12.2012 – casting doubt on the future of the plants in Italy and Spain Ineos was already trying to sell. All three units are not back-integrated. As far as Borealis' plant at Burghausen / Germany is concerned, the company recently told Plasteurope.com in an exclusive interview (see Plasteurope.com of 17.12.2012) that it has "nothing to announce" at the moment.

The styrenics sector remained under construction. Ineos-BASF joint venture Styrolution sold its ABS business, Elix Polymers, to an affiliate of Sun Capital Partners. As part of its portfolio restructuring, the jv terminated styrene monomer and polystyrene deliveries from Marl – see Plasteurope.com of 20.03.2012) – leading Ineos Styrenics to shut its plants there. BASF quit the EPS business in Malaysia and India, and was planning a realignment in Latin America and China.

The history of what became Elix Polymers succinctly illustrates the demise of the European market. After its transfer by Bayer to spin-off Lanxess in 2005 and the move of headquarters to Tarragona / Spain the same year, the new company sign was barely mounted before being covered with the Ineos logo.

The most important events of 2012 at a glance ...

Although the practice of hydraulic fracturing, or fracking, to recover shale gas has been around for two decades, 2011 and especially 2012 marked the large-scale comeback of North American ethylene and polyethylene players on the global stage – see Plasteurope.com of 21.05.2012. The cost advantages US competitors claim from powering crackers with ethane rather than naphtha are making European competitors green with envy.

Despite widespread opposition to fracking in Europe, major players such as BASF and Ineos are looking for ways to hop on the bandwagon. BASF chief Kurt Bock recently said that, through its US subsidiary, the German group is in a position to tap North American resources. While he left open whether oil and gas arm Wintershall will seek to pursue the practice at home, the Q4 issue of that company’s customer magazine dedicated an eight-page spread to the topic.

Ineos concluded a long-term supply agreement in 2012 covering import and storage of ethane feedstock from the US and suggested that its cracker in Grangemouth / UK could easily be switched to this “light feed” with only a few adjustments – see Plasteurope.com of 11.12.2012. Almost simultaneously, the UK, where earth tremors linked to fracking had forced a moratorium since June 2011, hinted that this could be lifted – see Plasteurope.com of 28.09.2012.

The most important events of 2012 at a glance ...

The global market for both biodegradable and non-biodegradable bioplastics is poised to grow rapidly over the next few years, studies published in 2012 have shown. Alongside emerging powerhouses such as Brazil and Thailand, growth rates of well over 30% have been forecast for Europe. Driven by bio-PET, non-biodegradable products dominate the sector – see Plasteurope.com of 22.11.2012.

In many new projects announced this year, including some involving European companies, the beverage industry is a demand driver. Up to 2020, Coca Cola, as part of the “PlantPET Technology Collaborative" (PTC) – see Plasteurope.com of 11.06.2012 – plans to develop soft drink bottles based on both renewable MEG and PTA. Competitor PepsiCo hopes to launch a PET-based bottle incorporating renewable resources such as switch grass, pine bark and grain sleeves – see Plasteurope.com of 01.08.2012 – but up to now nothing new has been announced about this project.

Although its star is fading as a producer of conventional plastics, Italy is becoming a dominant force in the European bioplastics market. Novamont’s “Mater-Bi” family of biodegradable and compostable bioplastics received a boost when it was selected as a supplier of compostable catering items and packaging for the London 2012 Olympic and Paralympic Games – see Plasteurope.com of 01.08.2012.

A consultation with EU cititzens conducted by the European Commission in late 2011 raised some eyebrows in the plastics industry in early 2012. Asked by the Commission whether stores should charge a fee for plastic carrier bags or whether an outright ban on disposable bags would be preferable, 65% of the more than 15,500 respondents said action to control throwaways was necessary, and more than 50% favoured a ban.

The most important events of 2012 at a glance ...

Despite this sentiment, Europe saw no fresh action this year, although the Italian government implemented a ban on non-biodegradable bags passed in 2011 – see Plasteurope.com of 25.01.2012. In an interview with PIE, Ulf Kelterborn, head of Germany's packaging producers association Industrievereinigung Kunststoffverpackungen said his group believed a ban would constitute a violation of both EU and international trade laws.

In North America, the city council of Toronto / Canada, voted to scrap its proposed plastic bag ban after facing lawsuits from retailers. However, California continued to stand its ground. In spring of 2012, the Los Angeles city council voted overwhelmingly to phase out one-trip bags, a step already taken to varying degrees by 47 other cities in the state – see Plasteurope.com of 05.06.2012.

Concerns about the health hazards of bisphenol A (BPA) continue to dominate headlines. An EU-wide BPA ban has been in effect since 1 March 2011, and in 2012, several member countries – notably France – passed farther-reaching bans or restrictions – see Plasteurope.com of 15.10.2012.

In October, the French Senate voted to extend an existing ban on BPA to all food contact packaging. A law reconciling this bill with legislation passed by the lower house could take effect from July 2015. Belgium and Sweden also have passed restrictive legislation this year. The plastics producers’ association PlasticsEurope said the measures were taken “regardless of sound scientific assessments.”

The US Food and Drug Administration (FDA), long criticised by consumer advocates for foot dragging on BPA, surprised observers in July by amending its food additive regulations to stipulate that infant feeding products can no longer contain the chemical. The move came at the instigation of the chemical producers’ association, American Chemistry Council and was considered somewhat unusual as the products are no longer in the market.

The most important events of 2012 at a glance ...