Polyolefins are expected to grow at more than 5% until 2010

Polyolefins have witnessed some difficult years recently, particularly in the regions of North America and Europe. Despite this, polyolefins, accounted for 88 million tonnes globally in 2002, continuing to influence the growth of plastics. While future projections from different pundits of polyolefins business, may vary, most of them agree that polyolefins would attain the level of more than 130 million tonnes by 2010, providing an average growth of 5% from 2002.

Infact China, the largest consumer of polyolefins, accounting for almost 14.5 million tonnes in 2002 (more than 16% of global consumption) will increase its share. This increase is estimated to almost 20% of global consumption, accounting for almost 25 million tonnes of consumption by 2010. Polyolefins are expected to grow at 7% in China, compared to about 4-5% in North America and Europe.

China continues to show positive growth regardless of what happens in the other parts of the World. Infact two major events; WTO and the 2008 Olympics in China will stimulate growth of polyolefins in China. While newer capacities are being developed with the help of investments from multinational companies , China is expected to be a big importer of polyolefin until 2010. Infact, by the turn of the next decade, imports could increase from about 4 million tonnes to as high as 8-10 million tonnes. This would be despite the development of almost 4-5 million tonnes capacity in China during the next decade. Most of these newer capacities are likely to be set up only around or after 2005.

While Asian coutries like Korea and Singapore may continue to be a major source of polyolefins in China, the newer capacities likely to be developed in the Middle Eastern region (Saudi Arbia, Iran, Iraq, AbuDhabi and Egypt) would play a major role in meeting China's insatiable demand.

The period 2004-2006 is expected to be very boyant all over the world. Capacity utilization could reach a very high level leading to price escalations. However the newer capacities expected to go on-stream in the second half of this decade would provide price stability.

2002 has seen a definite shift from PP to HDPE, on account of higher price due to tightening of Propylene feedstock. Despite this shift, PP is expected to show higher growth than Polyethylene. Infact, most of the pundits predict PP to grow at 6-6.5% compared to PEs at 4-4.5%. Among the PEs, LLDPE is expected to grow at more than 6.5%, while LDPE may lose its share in the LDPE/LLDPE segment to a level below 40% from the existing 52-53%.

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