Growth of key end-use industries such as packaging and automotive in Asia Pacific is expected to drive the global polypropylene market, expected to reach US$170 bln in 2022, as per Reportbuyer. In addition, increasing construction spending particularly in emerging markets of China, India and Indonesia is also expected to have a positive influence on the market growth. Volatile propylene prices on account of constantly fluctuating crude oil prices are expected to remain a key challenge for market participants. Stringent environmental regulations regarding production and disposal of polypropylene is also expected to degrade the market growth over the forecast period. In order to overcome these issues, major participants have shifted their focus towards development of sustainable polypropylene.
Injection molding emerged as the leading application segment and accounted for 46.1% of total market volume in 2014. Shift towards replacement of steel automotive industry in order to improve fuel efficiency of automobiles is expected to remain a key driving factor for this segment over the forecast period. Films are expected to witness the highest growth rate of 5.7% from 2015 to 2022. Growing demand for BOPP films for myriad of applications is expected to drive this segment over the forecast period. Further key findings from the study suggest:
* Global polypropylene market demand was 58.45 mln tons in 2014 and is expected to reach 87.35 mln tons by 2022, growing at a CAGR of 5.2% from 2015 to 2022.
* Asia Pacific continued its dominance in the global PP market accounted for 44.8% of total consumption in 2014. Asia Pacific is also expected to witness the highest growth of 5.8% from 2015 to 2022. Growth of automotive and construction industries in India, China and Indonesia is expected to drive the regional growth over the forecast period.
* Bio-based polypropylene demand is more dominant in emerged markets of North America and Europe. These markets are characterized by stringent regulations and aware consumers regarding the environmental hazards caused due petrochemical based polypropylene.
Polypropylene industry is characterized by low white space, high price sensitivity and numerous producers. The market is dominated by top multinational corporations which have presence across the value chain. Key industry participants are investing heavily in R&D initiatives and engaging in mergers & acquisitions with an aim to improve their product portfolio and increase production capacity. Some major industry participants include Braskem, Chevron Phillips Chemical Company, Japan Polypropylene Corporation, Reliance Industries Limited, BASF, Sinopec, Borealis AG, ExxonMobil, DuPont, LyondellBasell Industries, SABIC, Bayer Material Science, Fulton Pacific, INEOS, Total S.A, Washington Penn Plastic Company Inc., PetroChina Company Limited and Qatar Petrochemical Company.
As per Research and Markets, the global Polypropylene (PP) market in terms of demand was US$95.90 bln in 2014 and would reach US$138.36 bln by 2020 growing at a rate of 6.3% compounded annually. The global production of Polypropylene was 53.18 MMT in 2014 and is estimated to reach 70.81 MMT by 2020, at a CAGR of 4.89% for the forecasted period.
APAC leads the market with a share of 43% in 2014 followed by Europe. However, Middle East and Africa is expected to be the fasted growing market for the forecasted period in terms of demand. Growth in automotive and construction sectors in emerging countries like India, China, and Indonesia is expected to drive the growth in the APAC region. On the other hand, North America was the region where the demand had a decline in the previous years but is recovering slowly. Polypropylene is used in industries such as automobile, electrical & electronics, packaging, construction and medical industries. Packaging leads the market with a market share of more than 50% in 2014 followed by automotive industry with a market share of 15.47% in the same year. Equipments and facilities industry would also be one of the fast growing market during the forecasted period. Factors like demand in packaging industry, in light weighting vehicles is expected to drive the market during the forecasted period. On the other hand, factors like volatility in raw material prices, environmental issues would limit the growth of the market. Polypropylene manufacturers are shifting their focus from synthetic to bio-based polypropylene as a result of increase in demand for the latter. Global Polypropylene market is a fragmented market with top 5 players contributing 31% of the market share in 2014. However, with the industry witnessing acquisitions, the market is moving towards a consolidated one.
The industry is closely integrated with the global hydrocarbon industry. Propene, a refinery by-product and one of the most important petrochemical feedstock is the raw material for polypropylene. Thus, volatile oil and natural gas prices negatively impact the global market. Such volatility affects profitability and operational costs, thus hampering the global polypropylene market growth. Stringent regulations and directives against plastics usage owing to their hazardous impact on the environment during production and disposal are anticipated to retard the global market. Agencies such as FDA, REACH and ASTM have issued several directives concerning polypropylene usage and manufacturing. FDA and REACH have issued regulations governing the polypropylene film applications in food packaging. REACH has issued regulations governing the raw material used and the additives added in the manufacturing process. Shifting consumer trends towards bio-based propylene consumption coupled with favorable government initiatives are key factors capable of shaping the polypropylene industry in the future. Growing conventional polypropylene substitution by bio-based polypropylene is touted retard the global market development over the forecast period. R&D initiatives regarding cleaner disposal and manufacturing offer ample opportunities for the industry participants. Injection molding dominated the global application market over the recent past. Injection molding applications are spread across various industries such as automotives, packaging, construction, furniture, consumer goods, medical equipments and electronics. Emerging regions are touted to witness strong polypropylene applications demand owing to several key factors. These key factors include government initiatives to encourage infrastructure development, rapid industrialization, urbanization and increasing disposable income. Other key applications include textiles and film applications.