The impact of the covid 19 crisis may be divided between confinement and post-confinement period.
There will be a grey zone between both: Worldwide trade and travel will not resume overnight when confinement ends, and countries will not end confinement measures at the same time.
Confinement Start Dates
- Wuhan (China) – 23 January
- South Korea – 23 February
- Italy – 10 March
- Spain – 14 March
- France – 17 March
- Belgium – 18 March
- Australia – 21 March
- Germany – 22 March
- UK – 23 March
- US – 3 April
Worldwide trade has currently fallen by 32%. JP Morgan is expecting a 40 % GDP dip.
Crude oil prices are the lowest in 20 years: 20.09$ per barrel, a drop of more than 60% in 2020.
Crude oil price is the lowest since 1940s except for short period at the end of the 1990s.
West vs China
Confinement started end of January in China. February turnover will be impacted if business sphere is closely related to China. This is not so much the case for the bioplastics sector.
Impact of confinement measure is felt throughout the world. Western countries started their confinement measures mid March.
Plastics vs Bioplastics
Plastics and bioplastics are related but will not be impacted in the same way.
Crude oil prices are falling and history has thought us that low oil prices are a linear disadvantage for biobased plastics. In fact, the most important disadvantage of biobased plastics is price and thus indirectly oil prices.
Green investments may be delayed due to a climate of uncertainty created by the crisis…. one may speak of a self destructive or self fulfilling prophecy.
Ironically, our dependancy on fossil fuel will be the lowest since … maybe WWII.
The oil industry will reduce daily production to avoid implosion of oil prices.
Pre-corona daily oil production was around 80 – 81 million oil barrels per day. There’s a difference between production and consumption … in between lies “storage capacity” which will probably collapse in the next 60 days.
Oil barrel price may go down under 10$ per barrel during crisis.
- Group 1
Plastic applications whose usage are directly stimulated by the confinement measures;
Plastic medical devices that supposedly limit contamination: gloves, shoe covers, medical uniforms, face shields, etc
- Group 2
Plastic applications whose usage are indirectly stimulated by the confinement measures;
Plastic packaging for detergents, soap and sanitising gels.
Plastic food packaging: people are hamstering and piling up food reserves.
Plastic bottles: restaurant, hotels and on-the-go consumption will be replaced by home consumption. Restaurant and hotel usually serve drinks in glass bottles and on-the-go drinks are usually served in cans or small plastic bottles. Home consumption portions are usually served in large plastic bottles. This point is relevant for the PET bottle industry.
Restaurant are usually supplied in reusable / bulk packaging which will be replaced by individual portions sold partially in plastic packaging in supermarkets and local shops.
Increased home consumption will lead to increased use of domestic plastic waste bags.
- Group 3
Plastic applications whose usage are reduced by the confinement measures.
Most plastic applications.
Retailer in Europe are still respecting the plastic shopping bag ban.
Impact of Corona on Turn Over
No substantial impact of confinement measures on bioplastics sector.
The estimated impact of the confinement measures on the worldwide bioplastics sector (biobased and biodegradable) will be a reduction of around 15.75% on the forecasted worldwide turn over for the month of March.
- Week 09 (24 /02 – 1/03) – No impact
- Week 10 (2/03 – 8/03) : between + 0% and +5% on week 09
- Week 11 (9/03 – 15/03) first week Corona / Covid19 is felt in bioplastics sector: between -12% and -15% on week 10.
- Week 12 (16/03 – 22/03): between -24% and -26% on week 11.
- Week 13 (23/03 – 29/03): between +7% + 9% on week 12.
- Week 14 (30/03 – 5/04): between +1% to +4% on week 13.
Proverb of the Month
Whoever said one person cannot change the world … never heard of the chinese guy who eats undercooked bats.