Global polypropylene revenues to rise by 5.8% till 2021

The economic slowdown has had little effect on the global demand for polypropylene (PP), which totalled 55.1 million tonnes in 2013, according to the Germany-based market intelligence company, Ceresana, which expects PP revenues to rise by 5.8 percent per annum until 2021.
 
The plastic polypropylene (PP) possesses a good balance of properties that can be tailored to a wide range of production processes and applications. PP is therefore used in many different areas such as packaging material for foodstuffs and other goods, but also in countless other products such as household items, clothing, and vehicles.
 
According to Ceresana’s report ‘Market study: Polypropylene’, the opening up of new application areas, the development of biobased types of polypropylene and the substitution of other materials continue to offer high growth potential for the PP market. But the world market share of Western European PP producers is anticipated to fall from 13.9 percent to 11.4 percent in upcoming years. This is largely due to the only moderate increase of demand in the largest national markets, namely Germany, Italy, and France. Eastern Europe will grow more strongly. Especially in the Russian packaging sector polypropylene is able to gain at the favour of competing plastics like PET and PE.
 
The US as the world's largest consumer of rigid plastic packaging is reporting a recent increase of demand for PP again. China and India continue to see a massive increase of demand, which is why Asia-Pacific is expected to account for about 58% of total global demand in 2021.
 
“More than half of global PP output is processed into packaging products. The largest sales market is flexible packaging made from PP films. Rigid PP packaging, eg containers and caps, rank second. Fibres made from PP as well as consumer goods reached a share of around 12 percent each. The highest growth rate in the upcoming years is expected for consumption in the automotive industry. But the construction sector and the E&E segment are also likely to see PP demand increase by about 4 percent per annum each,” said Ceresana in the report.
 
The raw material situation will continue to relax, since production capacities for the PP feedstock propylene will be expanded notably in the future. Especially China will increase the use of alternative technologies to produce propylene (mainly PDH plants and CTO technology). As a result, a number of new PP plants will be constructed. A detailed analysis of production capacities in each country and of each company paints a conclusive picture of future growth regions. The region Asia-Pacific already accounts for almost half of the total global capacity and is likely to increase capacities by another 40 percent in the next eight years. Other important plants will be constructed in the countries of Eastern Europe and the Middle East. This overall development will lead to an only moderate increase of PP prices, which will result in a slight slowing down of growth in global sales.
 
Due to a reduction of production volume, Western Europe will turn from a net exporter to a net importer of PP. Despite an increase of own production, Asia-Pacific will reach a net import of about 2 million tonnes of PP. China first and foremost needs its output to satisfy domestic demand. Should all scheduled PP projects be realised, the Middle East in particular will considerably increase net exports and satisfy the rising global demand.