Texas in March this year by Chemical Market Associates
According to a presentation made at the World Petrochemical Conference held at Houston, Texas in March this year by Chemical Market Associates, polypropylene (PP) prices and demand have fallen substantially since mid-2008 and, with the coming on stream of a lot of capacity this year and in the near future, global PP operating rates of will only be between 75 and 80 per cent right through 2011. These are reported to be the lowest ever seen by the industry despite the moth-balling – both temporary and permanent – of almost 1 million tonnes of annual capacity in the US alone since early 2008.
The additional capacity coming on stream during 2009 and 2010 is about 5 million tonnes per year worldwide. On the other hand, PP demand is reported to have shrunk by 11 per cent during 2008 in North America. This is expected to keep PP prices in check and prevent passing on any increases in propylene monomer feedstock prices or energy costs. A large part of the demand drop is ironically due to reduction of material usage in containers (due to reduction in wall thicknesses and downsizing of container sizes) because of technological improvements in resin properties. More closures of unprofitable and inefficient PP capacities are expected, especially in North America.
Two Asian manufacturers of PP – PetroChina of Beijing and Reliance Industries of India – are expected to join the ranks of the world’s top 5 producers by 2013 at the expense of Total Petrochemicals of France and the Ineos Group of UK due to increasing per capita PP consumption in densely populated developing countries like India, China and South America.