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The Chinese polyethylene market size was US$13,865 mln in 2008 and is forecast to
grow by more than 8%, accounting for nearly 17% of the global polyethylene demand
in 2020, as per a report by Global Markets Direct. China has emerged as the principal
manufacturing and export location for low value plastic products in the world due
to low cost manpower and significant government support. The rapid increase in downstream
processing capacity additions, primarily geared towards export markets, will be
the main driver of polyethylene and polypropylene demand in the future. With over
40% of the demand dependent on imports, China will continue to remain the largest
importer of polyethylene in the world in spite of the many polyethylene capacity
additions expected to come on-stream in the next few years. The Middle East region
will see more than 7 mln tons of polyethylene capacity additions in the next few
years. With over 30% of the demand dependent on imports, China will continue to
remain the largest importer of polypropylene in the world despite the many polypropylene
capacity additions expected to come on-stream in the next few years. The Chinese
polypropylene market size was US$14,439 mln in 2008 and is forecast to grow by more
than 10%, accounting for 41% of the global polypropylene demand in 2020.
Production of polypropylene and polyethylene in most countries will be unable to
compete with the Middle East production as feedstock costs of the Middle East producers
are barely 20% of the cost of feedstock available to Asian and European producers.
The Middle Eastern countries, in their need to diversify from dependence on oil
revenues, support the growth of petrochemical industries to add value to their exports
and also to generate employment for local citizens. The Middle East region will
see more than 3 million tons of polypropylene capacity additions in the next few
years. Accounting for more than 50% of the global planned PE and PP capacity additions,
the Middle East region will emerge as the largest exporter of PP and PE in the world.
A new market study from Ceresana Research shows that PVC can expect to see continued
growth. As one of the oldest and most used products of the plastics industry,
PVC came under attack 20 years ago by environmentalist groups. After numerous scientific
investigations and improvement measures, the industry calmed the situation down:
The environmental aspects of this durable and fireproof material are now often looked
upon positively, the relatively minimal need for oil is also considered to be advantageous.
In 2008, the PVC world market reached a volume of 34 mln tons, whereas in the year
2000 demand had barely amounted to 24 mln tons. However, the 5% annual rate of growth
seen in the past will probably not continue. Nevertheless, Ceresana Research expects
global PVC demand to increase by an average of 2% pa, despite the precarious financial
crisis. The comprehensive study explains through individual regions and countries,
why PVC demand is forecasted to total more than 40 million tons by the year 2016.
While Middle Eastern nations are implementing enormous expansions in production
capacity for many other plastics, such as polypropylene and polyethylene (HDPE,
LDPE, LLDPE), with PVC they are not able to profit as much from their abundance
of raw materials. This is because PVC consists of only 43% of the petroleum/natural
gas derivative ethylene. PVC is mostly made up of chlorine, which can be obtained
in a multitude of regions from the extensive supply of salt. PVC is particularly
interesting to other world regions for this very reason.
The majority of PVC manufacturers are located in China , whereby these often represent
small, aged acetylene-based factories. Nevertheless, an increased number of modern
production facilities with capacities of 400,000 tons or more are being constructed
throughout the People's Republic. Correspondingly, the trade balance is also changing:
China is constantly becoming less dependent upon imports, and by 2009 PVC export
amounts are expected to surpass import totals. PVC manufacturers in India are profiting
from rising domestic demand. In contrast, the United States is dealing with excess
capacity: Production capacity decreases in the amount of 2 mln tons are anticipated
over the next several years, because otherwise no economical degree of efficiency
will be reached. Of the nine primary application areas, majority of global PVC demand
currently originates from building construction and civil engineering, that is to
say demand for pipes (38%) and for window profiles (20%). Other important areas
of application include films and sheeting, cable insulation, flooring, and shoes,
as well as medical products, such as intravenous drip lines. However, substantial
differences exist between the various regions. Demand for windows is rising considerably
in Russia , for example, while in Asia pipe production is playing a vital role for
PVC.
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