Innovation, in the period through to 2016, is pushing up sales of polypropylene in Europe in the face of fierce inter-polymer competition and slow economic growth, as per a study by Applied Market Information Ltd (AMI Consulting). Packaging applications will account for the largest volume of growth despite weak consumer spending and competitive pressures. PP is losing share to HDPE in caps and closures and under pressure from recycled HDPE in transit packaging. Recycled PET is also impacting the growth prospects for PP for instance in thin walled packaging. Despite these pressures PP is gaining sales via the development of new grades of resin offering high clarity and fast cycling and via the ingenuity of processors developing solutions with high levels of consumer appeal such as in mould labelling. Automotive will see some of the fastest growth driven by penetration gains. PP producers, compounders and processors have come together to offer automotive companies solutions which substantially reduce their costs. The fast uptake of long fibre PP is an example of this cooperation: LFT PP is used in a number of semi-structural applications but rather than being a direct replacement for existing materials, it requires substantial redesign hence the need for material supplier, processor and car company to collaborate in re-engineering modules. Not only does PP help reduce the cost of cars, but also it provides excellent opportunities for light-weighting which is a key objective in car design. The textile segment has had a difficult time since the downturn in construction activity. Residential construction was first hit and is now showing some early signs of recovery, whereas civil construction was hit more recently. Generally PP non-wovens have prospered better than other PP textiles. Europe remains the cradle of technical development of PP. In general, European producers have done an excellent job in shifting their businesses towards higher value applications as have PP processors. This success can be measured in the fact that Europe remained a net exporter of PP resin in 2011 despite the huge build up in capacity in the Middle East, as per AMI Consulting.

Ceresana expects a dynamic growth of worldwide revenues generated with polypropylene, amounting to more than US$145 bln in 2019. Especially the dynamic economic development in emerging markets will continue to boost demand for polypropylene (PP). The average annual growth rate of 4.4% of the last eight years is likely to be surpassed in the future. Asia-Pacific countries already account for more than half of worldwide PP consumption. 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. The analysts from Ceresana forecast countries in Asia-Pacific to increase their shares of the global PP market - mainly at the expense of saturated industrialized countries. Many emerging and developing countries benefit from an increasing demand in all application areas - in the automobile industry in particular. Demand for light weight, fuel-efficient vehicles is increasing all over the globe. Therefore, the automobile industry substitutes a rising number of parts made from metal or rubber for weight-saving plastics. Changes in regional demand will also have an effect on the production structure of manufacturers. The global PP capacity of about 62 mln tons is likely to extend by more than 23.5 mln tons by 2019. More than 57% of these new capacities will be built in the Asia-Pacific region. Major PP consumers are producers of flexible and rigid packaging, who account for an aggregated demand of more than 50%. Fibers made from PP as well as consumer goods reached a share of around 12% each. Also, the sectors electrics & electronics as well as the transportation and construction industry consumed a notable share of global PP demand with around 6% each. Among the other application areas are, for example, medical products such as single-use syringes, petri dishes, diagnostic devices and catheter. Decorative ribbons, corrugated cardboard and security foils for banknotes are also partially made from PP. For the following eight years, with 5.8% pa the largest increase in demand is expected for the transportation industry. At the other end of the spectrum are fibers with a 2.8% pa increase only. Major application area will, however, remain the sector flexible and rigid packaging, albeit with significant regional and country-specific differences. Especially in China and India, new factories are constantly being developed: Within the next five years, manufacturing capacities in both countries will be expanded by more than 7.5 mln tons. Despite rising prices, the strong demand from the packing and automotive industries, as well as from other growing sectors, such as the construction industry, has led to a continuous increase in the consumption of PP. Saudi Arabia and the other Gulf States want to become suppliers of more than just raw materials. Large PP production facilities are being constructed in order to provide high-priced end products. PP manufacturing capacities will more than double within the next five years. Although domestic demand within the Arab nations continues to remain low, export values will be superior. The Middle East is progressing to become one of the most important suppliers of PP. Throughout Canada, the United States, and Western Europe, small PP factories with capacities of less than 200,000 tons will continue to be closed. As a result of this, over the next few years the importance of these countries as PP exporting nations will continue to diminish. Since market prices are higher as compared to China or Saudi Arabia, for example, traditional PP manufacturers are faced with significant challenges. In order to develop innovative products, they need to improve the efficiency of production through better manufacturing methods, expanded distribution networks, a greater range of services for customers, and closer cooperation with the manufacturing industry. In recent years, the worldwide PP market carried a volume of 45 mln tons and a value of approximately US$65 bln. During the next few years, there will be a considerable increase in PP capacities and an improved supply of the preliminary product, propylene. However, cost pressures are rising as a result of higher prices for raw materials, energy, and transportation. The market research company is expecting that PP revenues will more than double by 2016, on account of higher prices and greater sales volumes.

As per Ceresana, the global market for polypropylene is expected to generate over US$145 billion in revenues in 2019. Particularly, the 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. Asian-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 million tons is expected to increase by over 23.5 million tons by 2019. The Asia-Pacific region will account for over 57% of these new capacities to be built. 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% per year 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.