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Supply Chain Shortages a Drag on Plastics Processing Equipment Shipments

Image: NicoElNino/Adobe Stock business forecast
The first two quarters of 2021 saw consecutive decreases in shipments of primary plastics processing machinery. Ongoing shortages of parts and components, which are causing longer order-to-delivery timelines, are partly to blame.

Supply chain–induced shortages are holding back shipments of primary plastics processing machinery, which saw a decrease for the second consecutive quarter, the Plastics Industry Association (PLASTICS) announced today.

The estimated value of injection molding and extrusion equipment shipments from reporting companies in Q2 of this year totaled $320.9 million, according to statistics compiled by the PLASTICS’ Committee on Equipment Statistics (CES). That is a 4.2% decrease from Q1, which recorded an 11.1% drop to start the year. Compared with the second quarter of 2020, however, plastics machinery shipments rose by 21.2%. The Q2 value of shipments varied significantly by equipment type:

  • Single-screw extruders increased by 33.1% compared with Q1 2021;
  • twin-screw extruders fell by 24.9%;
  • injection molding shipments dropped by 4.9%;
  • shipments of injection molding and single- and twin-screw extruders respectively were 19.5%, 37.8%, and 32.3% higher compared with Q2 2020.

Underlying trend in demand slopes upward

These numbers don’t give a complete picure of the overarching state of the plastics processing equipment market, however. New orders for plastics equipment have been increasing, according to PLASTICS’ Chief Economist Perc Pineda, but ongoing supply chain issues –- shortages of parts and components — are causing longer order-to-delivery timelines. “This explains the decrease in shipments in the second quarter. For the third consecutive quarter, plastics equipment shipments were higher from a year earlier. The underlying trend in plastics equipment demand remains upward sloping, still in sync with the robust economic recovery,” said Pineda.

Plastics machinery suppliers gauging the future seem to largely agree with that analysis. In a Q2 survey conducted by CES, 92.7% of respondents said they expect market conditions either to improve or hold steady in the coming quarter. The percentage was marginally lower from the 93.5% of respondents who expressed the same view in the Q1 survey. As for the next 12 months, 78.7% expect market conditions to be steady-to-better. This also is lower than the 93.0% of respondents in the previous quarter’s survey who were expecting growth in the next 12 months.

US plastics machinery trade deficit climbs 12.6%

Total plastics machinery exports decreased by 6.9% in Q2 2021 compared with Q1, totaling $367.6 million. Mexico and Canada remained the top export markets for US plastics machinery. Combined exports to USMCA partners in Q2 totaled $177.2 million, accounting for almost half of all plastics machinery exports. Imports rose by 3.5% to $874.0 million, resulting in a $506.8 million trade deficit. The US plastics machinery trade deficit increased by 12.6% in the second quarter.

Trade volume is expected to increase this year as global economic conditions improve. The World Trade Organization expects to see an 8.4% increase in global merchandise trade this year.

“Until the supply chain issues are resolved, and production lead times return to normal, [we should] expect to see fluctuations in quarterly shipments of plastics machinery,” said Pineda. “Nevertheless, the outlook for plastics machinery in the second half of the year is positive,” he added.

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