The last 5 years have seen demand growth for polypropylene (PP) outstrip the polymer market in Europe, as per Applied Market Information Ltd (AMI Consulting). Over the period PP demand has grown by almost 10%. However, even PP was not immune to the weak economic circumstances in 2012 and therefore much of its growth has occurred within the last 3 years. Its prospects over the next 5 years remain buoyant too. The packaging sector represents the largest demand for PP in Europe. PP is used in a wide range of rigid and flexible packaging applications from single use films, bottles and food containers to multi-trip large crates and boxes. Demand for PP in most of these applications has grown strongly, driven by growing retail activity and increasing penetration of PP in some applications where it is in competition with not only other polymers but also paper, metal and glass alternatives. However, in some applications, for example BOPP, imports have been increasing which has dampened PP's growth in Europe. Recent and planned investments in new capacity for BOPP will see this situation overturned in the next few years.
PP has increased its share of plastics used in the automotive sector. PP producers, compounders and processors have continued to strive to offer the automotive manufacturers solutions which substantially reduce their costs. In addition to its default position in many large components, for example bumpers and heating and ventilation systems, PP is securing a leading position in instrument and door panels whilst also continuing to penetrate structural applications where long fibre and other PP compounds offer light weighting opportunities compared to the incumbent materials. Whilst vehicle production in Europe has picked up very quickly in the last couple of years, PP has also benefitted from the trend in consumer preferences towards cars with more features and styling that increases the demand for PP per vehicle.
Textile and fibre applications have experienced weak growth overall in recent years. However, within this sector there are applications that have performed rather well in terms of volume growth, for example hygiene products to help offset other applications which have declined. In the traditional carpet sector PP applications have been increasingly challenged by competition from polyester carpets which have reduced in price. Consequently many producers have re-aligned their market focus, which together with some significant structural changes has placed much of the sector in a stronger position to take advantage of market developments.
PP's versatility makes it a strong contender in a wide range of other markets with construction, housewares, appliances and furniture being the most significant in terms of volume and the contribution to growth in recent years. In some sectors PP is challenged by the increasing use of recyclate but it generally lags behind other polymers e.g. PET and HDPE in terms of the development of systems for its recovery and re-use therefore recyclate is not expected to have a significant impact on the growth prospects for PP.
As European demand for PP has grown so too has the level of imports, which has increased sharply particularly from the Middle East where significant new capacity has been developed. However, despite the strength of global competition, Europe remains the cradle of technical developments in PP. European PP producers tend to focus on shifting their business towards higher value applications and providing solutions to support the PP processors seeking to do the same. Hence European exports of PP have only marginally declined and European producers have enjoyed increasingly high levels of utilisation.