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Shrink and stretch film demand seeing growth

December 26, 2011

A new Freedonia Group report says demand will rise 3.3 percent per year to $2.4 billion in 2015.

According to a new report by the Freedonia Group, US demand for stretch and shrink film will rise 3.3 percent per year to $2.4 billion in 2015, driven by accelerating demand for product packaging and for the bundling and protection of goods during warehousing and distribution, as well as by competitive advantages over other packaging materials. The report notes that other stimulants will include resin and machinery improvements, and opportunities in areas such as stretch hoods and stretch labels and sleeves.

Stretch film demand will increase 2.8 percent annually through 2015, benefiting from advantages in energy and labor savings. The fastest growth is anticipated for stretch hoods due to their cost advantages, high throughput rates and excellent load integrity and weather protection. Demand for shrink film will grow 4.2 percent annually to $970 million in 2015. Advances will be promoted by shrink film's high clarity and excellent print capabilities, greatly enhancing product marketability, the firm says. In particular, growth will be aided by increased use in labels.

Shrink film also provides a seal and moisture barrier and is frequently used in conjunction with corrugated trays as a case overwrap. According to the report, demand for stretch and shrink film resins is expected to rise 2.5 percent annually to 1.9 billion pounds in 2015. Low density polyethylene (LDPE) is the leading stretch and shrink film resin due to its competitive cost and excellent elongation, puncture-resistance and other properties. Demand for LDPE stretch and shrink film is forecast to see healthy growth through 2015. LDPE resins consist of linear low density polyethylene (LLDPE) as well as conventional LDPE. LLDPE's high impact strength, elongation properties and downgauging potential; and conventional LDPE's greater clarity and drawdown characteristics lead to their dominant usage.

Polyvinyl chloride (PVC) stretch and shrink film demand will remain relatively flat through 2015 in volume terms, though gains will be seen in value terms, The Freedonia Group says. Shrink sleeve labels for foods and beverages will be the primary area of opportunity for PVC, with other areas declining as a result of PVC's poor environmental image and competition from LDPE films. Other smaller stretch and shrink film resins include polypropylene, high density polyethylene, polyester (e.g., polyethylene terephthalate) and biodegradable resins.