Growing at over 5% pa, global polypropylene capacity expected to continue rising to 86 mln tons by 2018

24-Jul-14

Global polypropylene capacity increased at a Compound Annual Growth Rate (CAGR) of 5.2% from 2003, reaching 65 mln tons pa in 2013, and is expected to continue rising to 86 mln tons by 2018, at a slightly higher CAGR of 5.8%, according to GlobalData. China and Russia will be the leading contributors to future PP capacity increases and will account for a combined 45% of global additions over the next five years. Carmine Rositano, GlobalData's managing analyst covering Downstream Oil & Gas, says: "A demand-side push is driving additional capacity in China, forcing it to produce more domestic PP. Indeed, China will lead new global PP capacity increases over the next five years, as its goal of self-sufficiency drives 7.48 mln tons of additions, of which 97.6% will come from new plants and the remainder from the expansion of existing facilities." China is expected to account for 62.4% and 35.5% of planned Asian and global capacity additions by 2018, respectively. Russia will be the second largest contributor to growth, mainly due to the country's recent diversification into the petrochemicals sector, which has seen substantial investment in bulk polymer industries, such as polyethylene and PP. Rositano explains: "Until 2012, Russia's PP capacity was only 0.65 mln tons, but this increased to 1.33 mln tons in 2013 and is further expected to reach approximately 3.48 mln tons by 2018, with all additions coming from new plants." Venezuela and India will be the respective third and fourth largest contributors to capacity increases over the next five years, with both countries investing in the PP sector to cater to the domestic market and replace imports.