PCI Analyzes the Global BOPET Industry
- Published: July 24, 2014, By Debbie Donberg
NORTHAMPTONSHIRE, UK | PCI Films Consulting announces “World BOPET Film Market 2013–2018: A Statistical Review,” an analysis of the global commodity bi-oriented polyester (BOPET) film market.
PCI reports that ever since 2010, when BOPET film producers enjoyed high levels of profitability, they have seen their position weaken. New film extrusion capacity linked to a slowdown in demand has forced film pricing and margins to rock bottom levels. As a result, global film producers have had to take a long hard look at their business models. These same market factors have come as welcome news to commodity BOPET film buyers, helping them to enjoy a sustained period of price stability and a wider choice of competitive film suppliers.
The question now is, “Will the current ‘buyer’s market’ continue?” The simple answer from PCI’s analysis appears to be yes, at least in the short term. At a global level the world BOPET film market is currently oversupplied, largely as a result of the frenzy of new investment in film extrusion capacity in China. In most other regional markets, capacity increases have been more balanced and have aligned to increases in demand. Regional demand continues to grow, but rates have slowed and the supply shortages of 2010, which were the main cause of higher prices, are unlikely to be repeated anytime soon, says PCI. The over-supply situation in PTA, a film feedstock, is also expected to dampen any upward pressure on film pricing.
Says PCI’s managing director, Simon King, “While the BOPET film industry has become more global in recent years, regional supplier/customer relationships are still very important. The overcapacity in China has had little impact on supply balances in Europe and North America because customer’s demands on quality and lead times are such that domestic suppliers, even at marginally higher prices, are still preferred.”
Instead, BOPET film suppliers have had to find ways of improving profitability through differentiation, often by offering superior customer service and higher quality products, says the analysis. Many of the new suppliers have also begun to imitate the industry’s traditional suppliers by answering customers’ needs with tailored specialty products built around a technical support team and a dedicated R&D resource.
The report says one thing is certain: Business models previously built around the supply of commodity BOPET films no longer guarantee the level of return required to encourage further long-term investment. New products, new markets, and new business models are crucial.
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