Impact of COVID-19 on the Polyvinyl Alcohol Market
The novel corona virus pandemic is having a major impact on the chemicals industry. Demand for chemicals is experiencing severe shocks across end-markets, stock prices of several chemical companies have taken unprecedented hits, and the global supply chains are disrupted. The automotive & transportation, construction, and consumer products sectors are among the hardest hit end-markets, with demand for chemicals falling by over 30%. Whereas, the demand for pharmaceuticals, food additives, and disinfectants is peaking, and chemical companies exposed to these sectors are reporting record outbound volumes.
The chemical sector’s supply chain is strongly dependent on the Chinese market, which has been heavily impacted by the COVID-19 pandemic and instituted wide-ranging countermeasures to contain the pandemic, which includes shutting down of the industrial manufacturing sectors. In addition to creating potential challenges in obtaining necessary raw materials, the disruption of global supply chains has also been jeopardizing chemicals producers’ ability to deliver finished products to its customers.
The packaging industry is the largest consumer of polyvinyl alcohol, owing to its excellent oxygen and aroma barrier properties. With major industry sectors having stopped production, the governments have allowed manufacturing operations and delivery of essential commodities like food and medicines to continue. With food packaging being the packaging industry’s largest area of activity, the USD 900 billion global industry is on the front lines in this pandemic. However, the coronavirus crisis has already led to some of the sharpest declines in demand for certain types of packaging (industrial, luxury, and some B2B-transport packaging), while fast-tracking growth for e-commerce shipments (pharmaceuticals, FMCG, food) is being witnessed. Many packaging plants, along with food and pharmaceutical plants around the globe, are operational now and are likely to continue a steady growth in the years to follow.
Various leading players in the chemical industry have stepped up to produce raw materials required for safety products needed in order to limit the spread of the virus. Companies manufacturing fuel-grade alcohol are now manufacturing neutral alcohol for hand sanitizers and other disinfectants. The plastic manufacturers for sports gears are making medical shields. Key industry players such as Dow, Huntsman, and INEOS are ramping up the production of hand sanitizers. Moreover, Honeywell announced its plans to open a new manufacturing facility to produce protective masks, while Solvay partnered with Boeing to produce face shields in response.