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Article Type: Conferences, training and publications From: Pigment & Resin Technology, Volume 37, Issue 6

Strong Growth in the Polypropylene Market: New Study by Ceresana Research: the most versatile of plastics is thriving

The body of the new Smart “Fortwo“ is, for the first time, being manufactured entirely from Polypropylene (PP), and similarly, the bumpers and dashboard of the new Fiat 500. This most versatile of plastics is constantly being used in an increasing amount of applications. Whether used in ice-trays, drinking straws, washing machines, stadium seats, carpets, sporting clothes, surf boards, luggage, diapers or syringes: Polypropylene, invented some 50 years ago, is found everywhere in our daily life. Last but not least, modern plastic packages, for which huge amounts of PP are consumed, are reducing the spoilage of foods to a few percent, whereas in technologically less developed nations up to one half of all food is lost due to spoiling. The light, nontoxic material is usually easily recycled. It saves weight and often improves the ecological balance of products. PP is increasingly being used as a substitute not only for conventional materials such as glass or metal but also for other, relatively expensive plastics, e.g. polyester or PET (Figure 1).

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Figure 1

Asian Pacific is Growing Rapidly

Especially in China and India, new factories are constantly being developed: Within the next five years, manufacturing capacities in both countries will be expanded by more than 7.5 million tons. It can be already seen today that the Asian Pacific is the region with the largest share in PP production and consumption: the emerging countries have large, even when slow, dwindling cost advantages due to lower prices of raw materials and wages, as well as lower environmental/industrial safety regulations. Asia accounts for the largest demand in the packaging and automobile industry for PP, like in the rest of the world. The persistent demand from other growing regions, like for example the construction and textile industries or the medicinal field, caters likewise for the ever expanding consumption of PP, despite the general growing inflation and rising plastic prices. Smaller Asian suppliers will however be urged increasingly out of the market, or will otherwise be bought out from larger corporations like Sinopec or PetroChina.

The Middle East is becoming a Major Supplier

High growing rates can also be observed in South America and Eastern Europe. Saudi Arabia, Iran and the remaining Gulf Nations are growing the most however, those not wanting to become suppliers of more than just raw materials. Large PP production facilities are being constructed in order to provide high-priced finished products. At the same time they construct massive PP production plants, in order to come into the world market, providing products of higher added value. Teldene for example, is currently commissioning a new plant with a yearly capacity of 400,000 tons in Saudi Arabia; Ibn Zahr is starting off this year alone with an expanded 500,000 ton production capacity. In the next five years, the Middle East will more than double itself in its manufacturing capacity of PP. Although domestic demand within the Arab nations continues to remain low, export values will become superior: The Middle East is progressing to become one of the most important suppliers of PP and is expected to contest especially the American manufacturers and the interested export markets in China and India. A newer and rapidly strengthening player is Kazakhstan, profiting mainly from its abundances in raw materials.

Challenges for North America and Western Europe

Throughout Canada, the United States and Western Europe, small PP factories with capacities of less than 200,000 tons will continue to shut down. Innovene is approximated to close a factory this year in the Norwegian area of Bambe. At the same time, the largest production facilities will be expanded even further. Borealis for example is currently doubling its output in the Bavarian area of Burghausen. However, over the next few years the importance of the established industrialized countries as PP exporting nations will continue to diminish. Since their market prices are higher as compared to competitors from China or Saudi Arabia for example, traditional PP manufacturers are therefore faced with significant challenges. In order to develop innovative products, they need to improve their production efficiency through better manufacturing methods, expanded distribution networks, a greater range of services for customers, and a closer cooperation with the manufacturing industry.

Worldwide Growth

As the newest study from Ceresana Research shows; last year’s worldwide PP market carried a volume of 45 million tons and a value of approximately 68 billion US-Dollars (50 billion Euros). During the next few years, there will be a considerable increase in PP capacities and an improved supply of the preliminary product, propylene. The more intensive competition will barely be able to decelerate the expected growth in prices: several tens of thousands of processing companies stand opposite of about 100 PP major providers with more of the market power, all over the world. The clearly increasing costs of raw materials, energy and transportation are especially driving the price of PP and arresting the demand. The market researching company is expecting that PP revenues will more than double by 2016, on account of higher prices and greater sales volumes. An even further reason for the ongoing in sales growth is the additional turnover of qualitative and valuable types of PP and the increasing consumption of expensive PP Copolymers.

The polypropylene market study provides 900 pages of essential data on this rapidly growing market. It offers 100 company profiles for current and future manufacturers around the world, and the development of 64 nations is clearly detailed in specific country profiles. Additionally, it provides information about technical characteristics and application areas with regard to the different varieties of PP, and also gives an overview of relevant laws and environmental regulations. The market report is now available in English or German, exclusively from Ceresana Research: www.ceresana.com/en/