Global polypropylene demand to increase by 3.7% pa between 2013 and 2021

Global demand for polypropylene is estimated to increase by 3.7% pa between 2013 and 2021, while revenues from propylene will grow 5.3% pa, as per Ceresana. Ceresana says 85 million metric tons of propylene were processed globally in 2013, which includes its use in PP. New propane dehydrogenation plants in the U.S. and China will see propylene production rise in North America, following a drop in output that took place between 2005 and 2013. The highest growth rates will be seen in Eastern Europe, dominated by Russia and the Middle East, but Western Europe may suffer from pricing pressure and weak demand development. In China, due to limited resources of crude oil, manufacturers of propylene are dependent on imports. Therefore output of non-crude oil based propylene products are to be increased and these should help s he economic slowdown has had little effect on the global demand for polypropylene (PP), which totalled 55.1 mln tons in 2013, while PP revenues are estimated to rise by 5.8% pa until 2021. The opening up of new application areas, the development of biobased types of polypropylene and the substitution of other materials continue to offer high growth potential for the PP market. But the world market share of Western European PP producers is anticipated to fall from 13.9% to 11.4% in upcoming years. This is largely due to the only moderate increase of demand in the largest national markets, namely Germany, Italy, and France. Eastern Europe will grow more strongly. Especially in the Russian packaging sector polypropylene is able to gain at the favour of competing plastics like PET and PE. The US as the world's largest consumer of rigid plastic packaging is reporting a recent increase of demand for PP again. China and India continue to see a massive increase of demand, which is why Asia-Pacific is expected to account for about 58% of total global demand in 2021. More than half of global PP output is processed into packaging products. The largest sales market is flexible packaging made from PP films. Rigid PP packaging, eg containers and caps, rank second. Fibres made from PP as well as consumer goods reached a share of around 12% each. The highest growth rate in the upcoming years is expected for consumption in the automotive industry. But the construction sector and the E&E segment are also likely to see PP demand increase by about 4% pa each. The raw material situation will continue to relax, since production capacities for the PP feedstock propylene will be expanded notably in the future. Especially China will increase the use of alternative technologies to produce propylene (mainly PDH plants and CTO technology). As a result, a number of new PP plants will be constructed. A detailed analysis of production capacities in each country and of each company paints a conclusive picture of future growth regions. The region Asia-Pacific already accounts for almost half of the total global capacity and is likely to increase capacities by another 40% in the next eight years. Other important plants will be constructed in the countries of Eastern Europe and the Middle East. This overall development will lead to an only moderate increase of PP prices, which will result in a slight slowing down of growth in global sales. Due to a reduction of production volume, Western Europe will turn from a net exporter to a net importer of PP. Despite an increase of own production, Asia-Pacific will reach a net import of about 2 mln tons of PP. China first and foremost needs its output to satisfy domestic demand. Should all scheduled PP projects be realised, the Middle East in particular will considerably increase net exports and satisfy the rising global demand.