Polymer industry has slowed down to some extent since 2000. One of the key reasons is that the prices of polymers have gone up significantly due to an increase in price of oil and energy. Prices have moved upwards from H2-2004, compelling plastic users to accept higher prices of polymer material. They have very little choice in prices.
Fortunately plastics offer some inherent advantages compared to their traditional material. It is therefore expected that growth in this decade, although somewhat lower compared to earlier decades, will continue. Prices are expected to decide the growth potential for future. Since the Middle East enjoys advantage of lower prices of feedstock, the capacity build in the Middle East region would decide the prices of polymers. All experts agree that demand would depend upon the relative prices of polymers compared to the price of the conventional material that the polymer replaces.

Due to price volatility and consolidation of producers across the globe, processors would have to source the material from that part of the World offering better price deals. The increasing usage of web portals for trading of polymers would help processors to source material at the optimum price prevalent at the time of purchase. While processors may be willing to evaluate alternate polymer, they would not benefit in the long term. The classical example is the inter polymer competition between PP, PS and HDPE. Most of the time PP will win in this inter-polymer competition on the basis of price as well as performance.
Another adverse impact on polymer demand would be spiraling prices of energy. Though polymer products may not be very badly affected by energy cost increase, since polymer conversion involves lower energy consumption; a decrease in the overall demand due to slow down of economic downturn or lower economic growth would be the main reasons for lower demand of polymer. Polymer growth is closely related to GDP growth although its correlation is getting fuzzier as the time passes. Also the demand elasticity with GDP growth is continuously reducing from the earlier rates of more than 2 to less than 1.5 (i.e. demand growth of polymer is now less than 1.5 times that of GDP growth).

Both energy and oil as well as feedstock prices are expected to stabilize in the long run. Most experts believe that by 2010 the oil price could settle down at US$31/barrel compared to the present high price of US$60-70/barrel or an average price of US$55-60/barrel prevalent in 2005.
Processing capacity in individual segment can determine the growth prospect of the individual segment. The growth would be hampered where there is over capacity.
In cost optimization, additives as well fillers and reinforcements will play a more important role in controlling the cost and hence on the growth opportunities in future.
Processing machinery of higher capacity or lower cost/unit would increasingly play a crucial role in achieving some benefit on fixed cost component of the plastic product. “Just In Time” deliveries to reduce cost arising from working capital also would play an increasing role. It is expected that “Just In Time” will increase not only in the automotive sector alone but in other sectors as well.

Finally new innovative solutions, not only in materials, but in all aspects of the complete chain of finished end product as well as the recycling of the product would contribute to the newer areas and hence growth cycle of polymeric material.