The Revival of the Plexiglass Market
As people experience lockdown fatigue and economies reopen despite the ongoing pandemic, the demand for personal protective equipment has soared. Hand sanitizers and N95 masks are among the few visible commodities whose prices have surged. Meanwhile, businesses are curating creative solutions to ensure consumer footfalls. A key enabler of social distancing in consumer spaces have been the transparent glass-like fibers commonly known as plexiglass.
PMMA (poly methyl methacrylate) or plexiglass is a thermoplastic that has become an economic and widespread shatterproof substitute for glass. PMMA was originally designed for use in the medical industry due to its resilience and the fact that it isn't readily damaged by chemical cleaners.
The construction and automobile industry account for almost half of all plexiglass applications. Lights and signages account for another 20%. The plexiglass industry was enjoying a seller’s market in 2018 as PMMA became popular among car makers. The material was known for its glossy finish for interiors and high demand led to a bullish market. However, the automobile market began witnessing dampened demand by 2019 and by the time demand for automobiles themselves went bearish, many plexiglass production facilities had already came online, leading to a supply glut.
Plexiglass Responds to COVID
Plexiglass businesses could be described as steady at best during the pre-COVID era. However, 2020 saw these businesses transform into revenue-generating segments. The onset of pandemic ushered in a new demand for PMMA from offices, restaurants, retail and industries as a means to protect employees and arrest the spread of the virus. To meet the sudden surge in demand, manufacturers repurposed production lines meant for bathroom products and colorful plastic to produce clear plexiglass instead. Plexiglass has been in round-the-clock production this year to ensure adequate and quick supply. For example, production of acrylic sheets increased 300% from February to March 2020 at one of Perspex's facilities in the UK.
In order to secure their consumer base, plexiglass producers are neither claiming any issues in manufacturing nor in procuring raw materials. However, the bottleneck appears to be production time, which cannot be expedited any further. Manufacturers who cannot make plexiglass any faster have switched to making sheets from other transparent polymers, such as PET-G and Polycarbonate, as they can also be suitably used as protective shields.
While plexiglass manufacturers have their own distribution teams, a significant share of plexiglass is also sold through distributors who cut, shape and customize sheets as per specifications before selling it to local consumers. As demand piles up while supply remains consistent, a mismatch has emerged as the variety of acrylic sheets being used are not uniform. The demand for plexiglass glass has mostly been for partition screens and face shields, which are not of the same thickness as those used for automobile and construction purposes. As a result, distributors quickly run out of one type of plexiglass sheets but remain highly overstocked with the rest.
Outlook Moving Into 2021
Though COVID-19 might have shortly revived the plexiglass industry, it fails to completely offset the gap due to muted demand from the construction and automobile sector. Expo shows, retail outlets and construction projects that have been shut for a great deal of time have weakened the plexiglass industry. As the pandemic evolves and life strives to adjust to the new normal, the demand for plexiglass is expected to soar unless we find a reliable cure or vaccine. The form in which we chose to consume plexiglass may vary. The demand for face shields might reduce eventually, but as non-essential businesses and offices re-open, orders for plexiglass barriers are only set to rise.
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Santosh has over 12 years of experience managing large-scale procurement transformation engagements for leading Fortune 500 companies.
At GEP, he’s responsible for developing new products and services by incorporating complex aspects of mobile interfaces, social media, cloud computing and big data.LET'S TALK