According to the latest AMI Consulting report, the BOPP film industry continued to show robust growth during 2011, with demand advancing by 5.5% compared with 2010 to top 6 million tonnes for the first time.
Global demand is increasingly being driven by developments in Asia, particularly in China, India and Indonesia. With more than 60% of BOPP usage occurring in food packaging, it is the growth in demand in these countries for an ever-widening variety of packaged foods sold through supermarket outlets that is one of the principle drivers for this material. With large, youthful and growing populations, increased urbanisation and rising incomes, it is the developing markets of Asia that will continue to underpin growth in BOPP film demand.
AMI's analysis shows that China alone now accounts for 40% of global production and demand and on its own accounted for two percentage points of the global growth achieved in 2011. It accounted for 95% of all new capacity installed in 2011. Although production has and will continue to be primarily to serve the domestic market, the volume of output now is such that even modest export volumes have the potential to disrupt other markets.
However, it is noticeable that there was no investment in new lines for the more traditional markets of Western Europe, Japan and the USA in 2011, where growth continues to be more much more modest. US demand was not too bad in 2011, expanding by nearly 3% - the highest in five years, but Western Europe saw only a 1% increase in volumes and demand actually declined in Japan.
The high level of investment in new BOPP lines in 2011 in the emerging markets continues to challenge global supply and demand with average utilisation rates slipping to around 74%. According to AMI's report, BOPP film capacity is expected to increase by more than 2.5 million tonnes in the period 2011-2016, bringing total global capacity to nearly 11 million tonnes.
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