Global Polypropylene Market is Expected to Grow at a Healthy Rate from 2009 to 2020

15-Sep-10

In 2000, global polypropylene demand was 26.6 mln tons. Demand grew at a Compound Annual Growth Rate (CAGR) of 3.6% from the year 2000 to 2009 as per gbiresearch.com. The global polypropylene demand in the year 2009 was 36.5 mln tons. The global polypropylene 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 produced from propylene which is a monomer for polypropylene. Propylene is produced as a byproduct in the production of ethylene. The amount of propylene produced depends on the type of feedstock used. When light feedstock (natural gas) is used, a relatively small amount of propylene is produced. However, when a heavy feedstock (crude oil) is used, a comparatively significant amount of propylene is produced. Due to recent growth in the demand for ethylene derivatives, the industry is shifting more towards lighter feedstock. This phenomenon is more prevalent in the Middle East and North America. Ethylene and its derivatives produced from lighter feedstock are cheaper and hence are more profitable. But due to this, the amount of propylene produced is lower. Variations in the supply of propylene it affect the prices of both propylene and polypropylene and thus the profitability of the producers. Therefore, propylene supply shortages can prove to be a major hindrance to the growth of the polypropylene industry.