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Q1 Plastics Machinery Shipments Paused by Pandemic

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Demand for plastics remains fundamentally healthy, however, and the economic slowdown is transitory, stressed Perc Pineda, Chief Economist for the Plastics Industry Association.

Primary plastics machinery shipments, which includes injection molding and extrusion equipment, decreased in the first quarter in North America, according to data compiled and reported by the Plastics Industry Association (PLASTICS) Committee on Equipment Statistics (CES).

Plastics machinery exports in the first quarter totaled $538.5 million, a 1.6% increase from the previous quarter. Imports rose by 0.5% to $746.3 million, resulting in a trade deficit of $387.8 million, 0.6% lower than the fourth quarter of last year. The United States continues to rely on Mexico and Canada as its first and second largest plastics machinery export markets. Combined exports to the USMCA trade partners totaled $153.4 million, 42.9% of total U.S. plastics machinery.

The preliminary estimate of shipment value from reporting companies in the first quarter totaled $254 million, a 19.6% decrease, following a 7.7% increase in the fourth quarter of last year. The value of shipments of plastics machinery in the first quarter was 6.9% lower than the first quarter last year, said the PLASTICS report.

Shipments of single-screw extruders rise

While the total value of shipments decreased in the first quarter, single-screw extruder shipments rose by 15.5%. Shipments of twin-screw extruders declined marginally by 0.8%. Compared to the first quarter of 2019, the value of single-screw and twin-screw extruders were significantly higher by 34.9% and 19.3%, respectively. Injection molding equipment shipments’ value, however, fell 23.6% from the previous quarter and decreased 11.8% from a year ago.

“The first-quarter shipments were expected to come in lower due to the coronavirus shutdowns in March. Nevertheless, we saw robust growth in single-screw and twin-screw shipments on a year-over-year basis,” said PLASTICS’ Chief Economist, Perc Pineda, PhD.

CES also conducts a quarterly survey of plastics machinery suppliers regarding present market conditions and future expectations. In the coming quarter, 18.5% of respondents expect conditions to either improve or hold steady, lower than the 69.4% that felt similarly in Q4 last year. As for the next 12 months, 22.6% expect market conditions to be steady to better, down from 73.5% in the previous quarter’s survey.

“The coronavirus pandemic continues to disrupt the manufacturing and service sectors of the economy, both impacted by the plastics industry. However, the demand for plastics remains fundamentally healthy, particularly in the medical and consumer essentials spaces, and the economic slowdown is transitory,” Pineda added.

Milacron reports decline in revenue

In other plastics machinery news, Hillenbrand reported on May 7 that Milacron, a unit of Hillenbrand, saw revenue of $199 million, a decrease of 20% compared to the prior year due to continued softness for injection molding equipment and hot runner systems in certain markets, including automotive. Demand pressure was further exacerbated by the impact of COVID-19.  Milacron represents 39% of Hillenbrand’s revenue by business segment; revenue by geography shows 54% in the Americas.

Backlog of $187 million decreased 17% year-over-year due to lower injection molding and extrusion equipment orders; however, backlog grew 28% sequentially for both hot runner systems and injection molding equipment.

Hillenbrand’s business update for Milacron said that both injection molding and extrusion equipment saw a sequential increase in orders in fiscal Q2 but momentum slowed in March and continued to decline in April. Order rates for hot runner systems improved in March and April versus January and February, as government shutdowns in China were relaxed or lifted. Demand for medical and pharmaceutical projects increased because of the COVID-19 pandemic. Continued focus is on discretionary cost containment, said the company.

Image: Peshkova/Adobe Stock

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