Olefin feedstocks such as ethylene and propylene both showed good growth in 2005. Ethylene, which is used mainly for manufacture of PE polymers, has attained a level of global consumption of 110 million tons in 2005, growing by 5% over 2004. Propylene grew at a better pace at 5.5% in 2005 over 2004 and attained volume of almost 69 million tons in 2005. Both these feedstocks are predominantly used to manufacture polyethylene (PE) and polypropylene (PP). These robust growths can be attributed to healthy global economy in 2005 that grew by almost 4%. Both ethylene and propylene grew faster than the World GDP growth in 2005.
CMAI, a leading market research organization predicts that ethylene would grow by 4% from 2005 until 2010. It would be almost matching or marginally better than the expected overall growth (GDP) globally. Propylene is expected to do better and is expected to grow at an average growth of 5% from 2005 until 2010. Propylene has been growing better than ethylene in the past and is expected to grow faster than ethylene in the next 5 years.
The global capacity utilization was better in 2005, primarily due to two factors: on one hand, consumption grew very well in 2005 and on the other hand no new capacity was built in comparison to the consumption growth. CMAI believes that due to excessive new capacity coming up in the Middle East as well as in Asia , particularly in 2008, the capacity utilization in 2008 and 2009 could be lower compared to that observed in 2005.
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