Europe is likely to experience a decline in GDP by almost 4% in 2009. Polymer demand therefore could decline further by 3-4% in 2009 after a bad 2008 when polymer consumption dropped by 8% over 2007, as per AMI. Destocking of polymers by processors as well as polymer manufacturers was one of the reasons for decline in 2008 in addition to the weaker demand due to economic woes. Decline in polymer demand in 2008 was experienced after almost 3 decades of good growth. Some recovery in markets is possible by mid 2009 mainly driven by the packaging sector. The European processors are still buying polymer strictly to order, rather than rebuilding stocks to former levels. Many companies were not prepared for the steep decline in demand that occurred from August 2008 in the midst of economic uncertainty caused by the banking sector’s problems. In the last quarter demand declined on average by 20-25% for most polymers. PET demand declined by 3% last year, one of the smallest percentage declines among polymers, but still a setback for a material more used to growing at 6% pa. Polyolefin demand was down between 8% and 10% for 2008. The key construction and automotive markets were down in 2008. Downguaging of commodity polymers for packaging and re-engineering for ETP took place in 2008 which resulted in lower consumption. PVC had the steepest downfall almost to the level of 11% after 2 strong years of growth reaching 5.6 mln tons in 2008 because of collapse of property markets. PS also saw a big fall of 9% after a good 2007. ETP which generally has better growth rates than commodity polymers like polyolefins or PVC saw a decline of 7% in 2008. Automotive & electrical/electronic industries performed badly in 2008 due to weaker economic environment. Among the countries, UK & Spain were more severely affected but Germany was least affected due to demand from Eastern Germany & other parts of East Europe. As per another report by AMI, strong recovery in European sales for most thermoplastic resins is expected in Q4-09 as processors re-build stocks and economic recovery begins to take hold in Europe’s major economies as per AMI Consulting. Q4-08 was one of toughest markets ever seen for thermoplastic resins with apparent demand shrinking by around 25% as converters destocked and orders for everything from automotive car parts to packaging stalled. Sharp destocking continued through Q1-09 with volumes down by mid-year by around 15% on the previous year. Because much of the volume loss in Q4-08 was destocking, resin sales are expected to be strongly up in Q4-09 compared with last year. The market is mainly being driven by packaging, which now accounts for over half of all thermoplastic usage. Hygiene and medical markets are also still performing strongly, although these tend to be small markets in volume terms. Car production has remained weak, impacting demand for engineering resins and is not expected to pick up until after 2011. Research shows the polymer demand in Europe is increasingly pegged to GDP growth, which means that thermoplastic demand is reliant on a recovery in consumer spending and an increase in investments. A modest growth of 1-2% is anticipated in polymer demand for 2010 and slightly more robust growth of 2-3% for 2011 and 2012. However, even with this recovery it will take the European market until 2013 to recover to the volumes lost in late 2008.