The global polypropylene (PP) market has been under a lot of pressure lately from scarce propylene feedstock and slack demand. The demand for polypropylene has been highly impacted by use in recurrent markets such as for construction and automotive. Following the recession period and the slow revival state during the post-crisis years, the global market for polypropylene is seeing considerable demand increases as the key end-use fields expand production volumes, as per Merchant Research & Consulting Ltd. Some forecasts indicate future shortages of polypropylene on the market, as propylene feedstock suffers deficiencies. Despite consumers scouting for material substitutes amid high polypropylene price, the total PP market is not expected to witness a downtrend in the coming 5 years. Global PP demand grew at a Compound Annual Growth Rate (CAGR) of 3.6% from the year 2000 to 2009- from 26.6 mln tons in the year 2000 to 36.5 mln tons in the year 2009. Demand is expected to grow at a CAGR of 4.6% from the year 2009 to 2020. It is expected to reach 59.6 mln tons in the year 2020. Of the total global demand of 36.5 mln tons in the year 2009, Asia held the largest share of 51.9% followed by Europe with 22.3%. The demand in Asia is led by China and India. China and India are the fastest growing economies of the world in terms of GDP. Both the countries have a huge population. The per capita polypropylene consumption in India is very low but it is growing very fast with the growth in the GDP of the country. The per capita polypropylene consumption in China is high but it is still increasing at a very high rate to satisfy the needs of the country’s huge population. The share of Asia in the global polypropylene demand is expected to grow until 2020.
Polypropylene is used in a variety of sectors such as packaging, household appliances, automotive, construction, electrical, textile, agriculture and medical. Packaging, particularly food packaging, is the largest sector by demand. Biaxially oriented polypropylene (BOPP) is the form of polypropylene which has developed its usage for packaging in various applications. The world’s emerging economies like China, India and Brazil offer a huge opportunity for the polypropylene market owing to their evolving expenditure styles which are more prone to buy packaged materials. China will continue to dominate the global PP market, as major end-use sectors are showing strong growth in the country. The global PP industry experienced growth over the last five years and is expected to continue its growth momentum reaching approximately US$92 bln in 2017 with a CAGR of 3.7% over the next five years. Rising demand in end-user markets such as packaging, automotive and construction are expected to drive the industry, as per Lucintel. The chemical market research industry is consolidated and consists of high-density polypropylene, linear low-density polypropylene, and low-density polypropylene as segments. The Asia Pacific (APAC) region dominates this industry, accounting for 55% of the global market. A combination of factors such as demographic conditions, economic stability, and environmental regulations has had a significant impact on the industry dynamics. Lucintel’s research indicates that in 2011, the industry witnessed robust growth over 2010 due to the rise in polypropylene feedstock prices, such as the price of naphtha, which is directly related to crude oil prices. The industry is moving toward consolidation as the key companies develop expansion plans to seize future opportunities in the polypropylene market, which ultimately consolidates the industry. Continuous technological progress and strong R&D capabilities increased the application of polypropylene, thereby acting as a driver for the industry’s growth. APAC represents a sound growth market for the polypropylene industry during the forecast period due to changing food consumption patterns and increasing demand from emerging areas within the region. Technological development improvement through strong R&D activities is expected to drive the industry by leading to more innovative products. Highly volatile feed stock prices and energy inputs for final products create uncertainty and poses a challenge to the global PP industry.
Driven by economic development in up-and-coming markets, the global market for PP is forecast to generate more than US$145 bln in revenues in 2019, according to a new Ceresana report. Demand for PP is likely to crossover its 4.4% average annual growth rate of the past eight years in the near future. The global PP market will be driven by economic development in up-and-coming markets. PP capacity of nearly 62 mln tons across the world is expected to increase by over 23.5 mln tons by 2019 with the Asia-Pacific region accounting nearly 57% of the new facilities to be constructed. The present key customers for PP are flexible and rigid packaging producers, who account for an aggregated demand of 50%, while fibres made of PP and consumer goods accounted for a 12% each. The report also estimates that the largest increase in demand during the next eight years will be for the transportation industry at 5.8%.