The global polypropylene industry experienced growth over the last five years and is expected to continue its growth momentum reaching approximately US$92 bln in 2017 with a CAGR of 3.7% over the next five years. Rising demand in end-user markets such as packaging, automotive and construction are expected to drive the industry, as per Lucintel. The polypropylene industry is consolidated and consists of high-density polypropylene, linear low-density polypropylene, and low-density polypropylene as segments. The Asia Pacific (APAC) region dominates this industry, accounting for 55% of the global market. A combination of factors such as demographic conditions, economic stability and environmental regulations has had a significant impact on the industry dynamics. Continuous technological progress and strong R&D capabilities increased the application of polypropylene, thereby acting as a driver for the industry’s growth. APAC represents a sound growth market for the polypropylene industry during the forecast period due to changing food consumption patterns and increasing demand from emerging areas within the region. In 2011, the industry witnessed robust growth over 2010 due to rise in polypropylene feedstock prices, such as the price of naphtha, which is directly related to crude oil prices. The industry is moving toward consolidation as the key companies develop expansion plans to seize future opportunities in the polypropylene market, which ultimately consolidates the industry.

Ceresana expects a dynamic growth of worldwide revenues generated with polypropylene- the second most important plastic, amounting to over 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. 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 of electrics & electronics as well as the transportation and construction 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% per year the largest increase in demand is expected for the transportation industry. At the other end of the spectrum are fibers with a 2.8% per year increase only. Major application area will, however, remain the sector flexible and rigid packaging, albeit with significant regional and country-specific differences

Demand within the polypropylene market has been forecast to increase at a CAGR of 4.5% over nine years, rising from a total of 42.3 mln tons in 2011, to reach 62.4 mln tons by 2020, as per Companies and Markets Research. The global polypropylene market has been under a lot of pressure from scarce propylene feedstock and slack demand. The demand for polypropylene has been highly impacted by use in recurrent markets such as for construction and automotive. Following the recession period and the slow revival state during the post-crisis years, the global market for polypropylene is seeing considerable demand increases as the key end-use fields expand production volumes. At a global level, polypropylene production and demand were dominated by developed countries in the early 2000s. An expanding population base, improving lifestyle, rapid industrialisation and economical robustness have resulted in the substantial growth of polypropylene demand in the developing markets of the Asia-Pacific region. China has emerged as a global leader in terms of polypropylene production and consumption, while the relatively developed markets of South Korea and Japan already accounted for major shares. A similar growth pattern has been observed in the Indian polypropylene market. Global demand for polypropylene has increased over the last decade due to increased consumption by end-use industries worldwide. The packaging industry was the largest end-use segment in 2011, when it accounted for around 30% of global polypropylene demand. The equipment and facilities industry demonstrated the second highest growth rate in terms of polypropylene demand during this period. Geographically, the Asia-Pacific region dominated demand growth in the global market, while the highest growth rate was demonstrated by the Middle East and Africa region, where demand for polypropylene increased exponentially between 2000 and 2011. North America was the only region where polypropylene demand registered a net decline.

Organic polypropylene is predicted to become more popular in the future, as increasingly affluent lifestyles and ambitious industrialization drum up global demand for the multipurpose material, as per GBI Research. Overall polypropylene consumption is expected to rise from 42.3 mln tons in 2011 to 62.4 mln tons by 2020, growing at a healthy CAGR of 4.5%. Polypropylene consumption by the packaging industry alone is expected to increase from 12.8 mln tons in 2011 (accounting for 30% of the total polypropylene market that year) to around 20.1 mln tons in 2020, with food packaging and flexible packaging fuelling this increase. In addition, the electrical industry and equipment and facilities industry are each expected to demand over 3 mln tons of polypropylene by 2020, due to economic growth, improving lifestyles and developing industrialization. Global demand for polypropylene increased over the last decade due to high growth in the retail industry, which led the packaging industry to be the polypropylene’s largest end-use segment. Other industries, such as electrical, equipment and facilities, and household appliances also registered substantial growth in polypropylene consumption. The packaging industry is expected to continue its dominance in future, while the equipment and facilities industry and the electrical industry will also register high demand growth due to the replacement of metals with plastics worldwide. During the forecast period, polypropylene demand in North America is expected to recover from the negative market growth observed in 2010-2011, while the Eurozone crisis is expected to restrict the future growth of the European market. Polypropylene production and demand was historically dominated by developed countries, but the expanding populations and economic growth in developing Asian markets have caused a boom in polypropylene demand. China has emerged as a global leader, while South Korea, Japan and India also account for major market shares. Changing petrochemical feedstock dynamics adversely affect the polypropylene market, however. Heavy fluctuations in crude oil prices have contributed to substantial price hikes in the polypropylene market over the last two years, which cannot be easily transferred to consumers or end-use markets. If the market stabilizes, prices are expected to come down during 2013 and 2014.