Polymer distribution in Europe by country 2014.
A new report from AMI Consulting has shown polymer distributors have seen a growth in sales for the second year running.
In 2014, more than 12 percent of polymer consumed in Europe was sold via distribution channels, equal to around 3.4 million tonnes.
Distributors’ sales hit their lowest points in 2009 during the recession and again in 2012 due to weak polymer demand affected by the Eurozone crisis.
However, sales grew at an average of over three percent a year in 2013 and 2014 and for the first time in seven years surpassed the volume of sales reached in 2007.
The market has been driven by the ongoing rationalisation by polymer suppliers of their customer base and increasing threshold at which they handover customers to distributors.
The important role distributors play in the supply chain has been well illustrated by recent market development, including falling oil prices in the last quarter of 2014 and weakening demand leading to rapid destocking by processors.
As a result, from the beginning of 2015, both processors and distributors were caught by surprise by extreme raw material shortages exacerbated by an unexpected string of force majeure at a time when spring buying was kicking in.
The tight market has caused prices to rebound strongly and the ensuing shortages has led some processors shutting down lines and industry trade associations lobbying hard in the press for producers to invest in new European production.
However, it is in these difficult and tight market situations that AMI says the distributors' “skilful, flexible and rapid relief” offered to troubled customers is well rewarded.
Increasingly it is distributors who are expected to be the ones who will offset the sudden changes in the polymer supply/demand balance for both suppliers and plastics processors.
During 2014-2015 the distribution sector was buzzing with acquisitions and further consolidation is expected to continue over the next five years as companies seek new geographies, end markets or distribution mandates.
Over these next five years the European distribution market is expected to advance at double the rate of polymer demand, encouraged by improved confidence in the market.