The Asia-Pacific market is anticipated to be a leader for polyolefins with respect to demand. The region has the presence of most global leaders in polyolefins manufacturing. Polyolefins consumption in the region is estimated to grow at a CAGR of about 6.2% from 2013 to 2018, as per MarketsandMarkets. The region has a relatively high growth rate as a result of its continuously increasing demand. The demand in the region is mainly due to the increasing appetite for polyolefins in China. The Middle East, being the second fastest growing polyolefins market world-over, is estimated to grow at a CAGR of 5.5% for the next five years. Middle East is witnessing high industrial growth which hints at an increasing demand for polyolefins for its diverse applications. Saudi Arabia dominates the polyolefins market in the Middle East being a major consumer and the fastest growing country in terms of polyolefins production. Currently, a high share of polyolefins is consumed by the film & sheet industry and the demand for polyolefins through film & sheet industry is expected to grow in next five years at a CAGR of more than 4.7% from 2013 to 2018. Other Middle East countries are also showing increasing growth in demand for polyolefins. Moreover, polyolefin manufacturers from Middle Eastern countries are putting vigorous efforts for developing a strong base of polyolefins market, with a target of rising polyolefins exports.
As per Research and Markets, the global polyolefins industry is witnessing significant growth on account of increasing applications, technological advancements, and growing demand in the Asia-Pacific region. Polyolefins is a preferred and widely accepted polymer due to its inherent properties and wide range of applications. Polyolefins consumption has grown significantly in the recent times and is at an emerging stage in various countries. Currently, Asia-Pacific is the largest market of polyolefins, acquiring more than 45.3% of the global market. The region has huge installed plant capacities of polyolefins. The polyolefins market is emerging in various countries like China, South Korea, India, Saudi Arabia, Brazil, etc due to increasing industrial activity. Also, large number of emerging manufacturers from Asia-Pacific is expected to reduce import dependency and is expected to drive the polyolefins market in future. Due to the easy availability of cheaper raw materials and the increase in new applications, the use of polyolefins in various industries is becoming popular. Moreover, in North America, shale gas boom has provided an opportunity for availability of cheaper raw material, thus widening profit margins for the producers hence, providing a boost to the polyolefins industry. Injection-molded plastics industry is flourishing at a fast pace in emerging economies such as: Asia-Pacific, ultimately driving demand for polyolefins in these regions. The key manufacturers of polyolefins such as: LyondellBasell Industries NV (The Netherlands), The Dow Chemical Company (U.S.), Saudi Basic Industries Corporation (Saudi Arabia), China National Petroleum Corporation (China), etc. are investing in expansion activities and new product launches to meet the growing demand of polyolefins.
As per BCC Research, the global market for polyolefin resins was valued at US$151.1 bln in 2011. Total market value is expected to reach US$187.5 bln in 2016 after increasing at a five-year compound annual growth rate (CAGR) of 4.4%.The market for polyolefin resins can be broken down into two segments: polypropylenes (PP) and polyethylenes (PE). The PP market totaled US$62.4 bln in 2011 and should reach nearly US$78.3 blnn in 2016, a CAGR of 4.6%. As a segment, the PE market was valued at US$88.7 bln in 2011 and should total nearly US$109.3 bln in 2016, a CAGR of 4.3%. PE and PP are the world’s most widely used commodity plastic resins. PE is the world’s largest plastic resin in value terms, and PP is the second-largest. They accounted for a total of about 55% of the global plastic resins consumption in volume terms in 2010.
As per ReportsnReports.com, China’s appetite for polyolefins just keeps growing, and Thailand and Singapore are set to profit handsomely from their exports. The research states that exports from Southeast Asian countries to China have increased three-folds in the last decade, and anticipates that trade agreements present within Asia will promote further growth in plastics business. A large portion of polyolefins produced in Southeast Asia is exported to the Chinese market, which is the largest importer and consumer of polyolefins in the world. China's demand for polyolefins is expected to grow from 31.45 mln mtpa in 2011 to 41.13 mln mtpa by 2016 at a CAGR of 5.5%. The Association of Southeast Asian Nations (ASEAN) places neighboring countries in an ideal position to trade among one another, as the ASEAN Free Trade Agreement (AFTA) allows trade between member countries with zero import duty. Singapore and Thailand are members of ASEAN, and China has entered into a China-ASEAN Free Trade Agreement (CAFTA) with a corresponding zero import duty regime, allowing these countries to conduct more economical trade. Thailand is the biggest exporter of polyolefins to China, and also boasts the largest consumption and production of polyethylene and polypropylene in the Southeast Asian polyolefin industry. Large natural gas reserves in the Gulf of Thailand provide abundant feedstock, and the location of polyolefin plants in Rayong in the eastern seaboard provides close proximity to sea routes for transportation. Closely following Thailand's industry prowess, Singapore is gradually making its presence felt as a petrochemicals exporter. Singapore does not have a huge demand for polyolefins, but has become a major polyolefins exporter to other Asian countries, attracting exporting companies due to the nation's ideal location and robust infrastructure for petrochemical exports. The country also acts as a global trans-shipment hub for Middle Eastern imports into Asia, making use of AFTA's zero import duties. Other Asian countries import their polymers too, giving Thailand and Singapore extra business. Indonesia is the second largest consumer of polyolefin resins in Southeast Asia, but depends on imports due to insufficient growth of domestic production capacity. Vietnam also lacks the production infrastructure to satisfy domestic demand for polyolefins, which has been growing continuously by more than 15% pa over the last decade. Polyethylene demand in Southeast Asia is expected to increase from 4.89 mln mtpa in 2011 to 6.17 mln mtpa by 2016, while production is expected to increase from 6.28 mln mtpa to 9.29 mln mtpa during the same period. Demand for polypropylene in the region is expected to increase from 3.63 mln mtpa in 2011 to 4.67 mln mtpa in 2016, and production is expected to improve substantially from.
As per Global Markets Direct, with over 30% of the demand dependent on imports, China will continue to remain the largest importer of polyolefins in the world in spite of the many polyolefins capacity additions expected to come on-stream in the next few years. The Chinese polyolefins market size was US$28304 mln in 2008 and is forecast to grow by more than 15% annually, accounting for 27% of the global polyolefins demand in 2020. Feedstock costs of the Middle East producers are 1/5th of the cost of feedstock available to Asian and European producers and the need to diversify from dependence on oil revenues is driving the polyolefins capacity buildup in the Middle East. Accounting for more than 50% of the global planned polyolefins capacity additions, the Middle East region will emerge as the largest exporter of polyolefins in the world. Continuous innovation in packaging applications is helping the replacement of traditional packaging materials with polyolefins. Food packaging, which includes thin walled containers and films, is driving the demand for packaging in developing and developed countries alike. As a result of such innovation, the demand for polyolefins in packaging applications has the best growth potential among the various end-use applications. This sector has been relatively less affected from the recession compared to sectors like automobiles and construction. Packaging sector accounted for 60% of the global polyolefins demand of US$175,307 mln in 2008 and according to Global Markets Direct estimates, it will continue to be the market with the greatest potential to account for 63% of the global polyolefins demand in 2020.