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Global PE and PP markets to show robust growth in next 5-7 years

Global PE and PP markets to show robust growth in next 5-7 years

Global market for polypropylene (PP) will reach US$155 bln (�127 bln) by 2019, boosted by especially strong growth in emerging markets, as per Ceresana. Especially the dynamic economic development in emerging markets will continue to boost demand for polypropylene (PP). The average annual growth rate of 5.5% of the last eight years is likely to be surpassed in the future. Thus, this region is the most important sales market, followed by Western Europe and North America. Yet distribution of demand for PP in the various regions of the world is likely to change notably. Asia Pacific countries are the largest consumers of polypropylene, representing over 50% of global consumption, followed by Western Europe and North America. However, polypropylene demand distribution in different parts of the world is expected to change considerably. Rising demand for polypropylene in a myriad of applications, especially in the automobile industry benefits several developing countries. Regional demand changes will also affect the manufacturing structure of producers. The worldwide polypropylene capacity of nearly 62 mln tons is expected to increase by over 23.5 mln tons by 2019. The Asia-Pacific region will account for over 57% of these new capacities to be built. And moving forward, the Asia Pacific region will take up an even greater chunk at the expense of industrialised countries. Global PP capacity is likely to increase by more than 23.5 mln tons by 2019 and 57% of these new capacities will be built in Asia Pacific. Currently, the major consumers of PP are producers of flexible and rigid packaging, who account for an aggregated demand of 50%. Fibres made of PP and consumer goods accounted for a 12% each. The sectors of electrics and electronics, as well as transportation and construction, accounted for 6% each. The largest increase in demand over the next eight years will be for the transportation industry-5.8%. Rigid and flexible packaging manufacturers are the major consumers of polypropylene, representing over 50% of demand. Consumer goods and polypropylene fibers represent a share of approximately 12% each, while the construction, transportation and electrical and electronics industries represent a share of roughly 6% each. Other applications fields include security foils for banknotes, corrugated cardboard, decorative ribbons, and medical products such as catheter, diagnostic devices, petri dishes, and single-use syringes. With 5.8% pa for the next eight years, the transportation industry is likely to represent the largest rise in demand. Fibers are at the other end of the spectrum with only 2.8% increase in demand per year. Nevertheless, the rigid and flexible packaging sector will remain the largest application market in spite of regional and nation-specific variations. Strong economic development in up-and-coming markets will drive polypropylene demand. The report also predicts that the polypropylene market may surpass its 4.4% average annual growth rate of the past eight years in the future.

The global polyethylene industry experienced strong growth over the last five years and is expected to continue advancing as it reaches approximately US$148.1 bln in 2017 with a CAGR of 3.5% over next five years, as per Lucintel. Strategies such as new product innovation, processes, and feedstock technologies are expected to help players capture market share. APAC dominates the polyethylene market and represents 41.8% of the global market. A combination of factors such as feedstock price (crude oil and naphtha), feedstock availability, lightweight properties, energy costs, environmental issues and government regulations are affecting the industry dynamics significantly. Polyethylene is a consolidated industry and consists of high-density polyethylene (HDPE), linear low-density polyethylene (LLDPE), and low-density polyethylene (LDPE) as the segments. Lucintel's research indicates that in 2011 the industry witnessed solid growth over 2010 due, in part, to increased government stimulus packages in infrastructure developments in the piping sector of pipe industry. APAC is forecast to witness the highest growth during 2012-2017. APAC and the Rest of the World (ROW) both represent sound market growth potential for the polyethylene industry during the forecast period. China and India are expected to drive the polyethylene industry due to low-cost labor, downstream processing capacity additions, and government-supported subsidy packages. They present great growth potential in the plastic films and sheet market. The introduction of ultra-high molecular weight polyethylene and sugarcane-based polyethylene are emerging trends that are expected to affect the future growth in the industry.

 
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