The global metal packaging and coatings market will reach $112.4 billion in 2020. This represents a fall of $4.8 billion compared to 2019; as the industry, and especially industrial segments, reacts to the impact of the coronavirus pandemic. Critically it will return to positive growth in 2021, and stronger than before Covid-19.
This insight is drawn from the new Smithers study – The Future of Metal Packaging and Coatings to 2025 – its most detailed ever examination of this sector.
It finds that the coronavirus will impact demand for different metal packaging formats differently. Overall a post-Covid tailwind will raise the 2020-2025 industry compound annual growth rate (CAGR) to 3.1% – almost twice that predicted in pre-pandemic forecasts. This will push worldwide value to $131.2 billion in 2025, at constant prices.
The imposition of lockdown orders in Europe and North America in H1 2020 has caused a surge in demand for food cans of around 10%, as consumers stockpiled tinned foodstuffs. There has also been a rise in demand for beverage cans as drinkers move away from bars and restaurants to socially distanced home consumption. In contrast, disruption to international trade is impacting bulk metal containers, fabricated steel boxes, and shipping barrels & drums seriously; with 80% of the 2020 demand drop confined to these formats.
Smithers’ analysis sub-divides the market into five segments: cans (beverage, food, aerosol, and other cans); metal closures; industrial bulk containers; industrial drums and barrels; and other aluminium containers. The largest sector by value is cans, and in 2019 represented 56% of total value. With beverages accounting for 70% of this by volume, future developments – including for soft drinks, energy drinks and beer – is seeing can makers invest in adding capacity as they enter the 2020s.
This will be supported by parallel trends, including the demand for more sustainable, recyclable packaging; a criterion on which aluminium and steel perform well compared to PET bottles. Consumption of carbonated soft drinks (CSDs) is being slowed by healthy eating trends and taxes on high-sugar products; but growth is strong for all other non-alcoholic drinks, fuelling use of speciality cans. Aerosol demand will be relatively flat in developed markets, but see appreciable growth in developing regions across 2020-2025 – especially in Brazil and China.
Sustainability targets, and cost, favour further lightweighting of metal packaging. For cans the priorities moving forwards will be wider use of lower weight can ends, and replacement of three-piece cans with two-piece constructions. In aerosols, weight savings are being enabled by the use of alloy slugs, and there is new interest in bag-on-valve designs for both single and dual-dispensing products.
In congested consumer applications, there is an impetus for brands to invest in enhanced decoration. To deliver this conventional metal packaging print equipment is being enhanced and supplemented by more inkjet installations; which are allowing more variated and innovative designs, improved matte or glossy finishes, and tactile effects.
In coatings, food can makers have largely moved to replace epoxy phenolic coatings, in response to pressure from legislators and public health lobby groups over bisphenol-A (BPA). This is despite the substance being cleared in that application by regulatory authorities in the US and EU. The substitution process will potentially extend into less mature economies over the next five years.
The full impact of Covid-19, and other market and technology trends is examined in depth in the new Smithers report – The Future of Metal Packaging and Coatings to 2025. This includes Smithers’ most comprehensive ever dataset for this market (by value and volume). Presented in over 200 tables and data figures, it segments the market by metal packaging format and end-use application across 27 geographic regions and leading national markets.
This essential business strategy guide for metal packaging suppliers and converters as they enter the 2020s is available to purchase now priced $6,500 (€5,250, £4,750).