Jul 25 2014
End-Use Sectors in Asia-Pacific to Drive Growth" 2014 market research report says worldwide polypropylene capacity increased at a Compound Annual Growth Rate (CAGR) of 5.2% from 2003, reaching 65 million tons per year (mmty) in 2013, and is expected to continue rising to 86 mmty by 2018, at a slightly higher CAGR of 5.8%.
It forecasts China and Russia to be the leading contributors to future polypropylene capacity increases, and will account for a combined 45% of global additions over the next five years.
As per the managing analyst covering downstream oil & gas for the publishing team of this research, a demand-side push is driving additional capacity in China, forcing it to produce more domestic polypropylene. China will lead new global polypropylene capacity increases over the next five years, as its goal of self-sufficiency drives 7.48 mmty of additions, of which 97.6% will come from new plants and the remainder from the expansion of existing facilities.
The Global Demand, Capacity and Prices for Polypropylene - End-Use Sectors in Asia-Pacific to Drive Growth research also forecasts that China will 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 polypropylene. Until 2012, Russia's polypropylene capacity was only 0.65 mmty, but this increased to 1.33 mmty in 2013 and is further expected to reach approximately 3.48 mmty by 2018, with all additions coming from new plants.
This report also states that 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 polypropylene sector to cater to the domestic market and replace imports. In the next five years, China and India are likely to add polypropylene capacity of 7.48 million tons per year (mmty) and 1.675 mmty respectively. Overall, polypropylene capacity in Asia-Pacific is expected to increase by around 12 mmty by 2018.
Global Propylene Industry - On-Purpose Technologies to Gain Prominence is another market research report of 57 pages and published in April 2014. The report gives the historic and forecast, market size, demand and production figures by region. It covers all five regions that include Asia-Pacific, Europe, North America, South America, and Middle East and Africa. It says the global propylene industry is witnessing a change in the feedstock scenario in various parts of the world. In North America, propylene supply from steam crackers is expected to decrease in coming years as abundant and inexpensive natural gas liquids (NGLs) feedstock form shale gas is slowly replacing heavy feedstock in steam crackers. Persistently high crude oil price is also discouraging the use of naphtha China and Europe. To cope with the changing feedstock scenario and high crude oil prices many producers are embracing on-purpose propylene technologies which produce high quantities of propylene by using alternative feedstocks such as NGLs and coal. Use of these technologies is being witnessed mostly in Asia-Pacific and North America. In Asia-Pacific, more than 50% of new capacity will come from on-purpose technologies while in North America, 100% of the new capacity will come from on-purpose technologies. With the increasing demand for propylene and uncertainty of propylene supply from stream crackers, the use of on-purpose technology will continue to increase in the future.
Global Polyethylene Industry - Emerging Markets in Asia-Pacific to Drive Modest Growth is a 2014 market research report that says global polyethylene industry has witnessed a period of low growth in the last two years due to a slowdown in China and India, which showed strong demand in the past decade and proved themselves to be the growth engine of the global polyethylene industry. Russia has emerged as another growing market for polyethylene with a twofold increase in demand volume in the last decade. It is also expected to show a strong demand growth rate over the next five years. The Middle East and Africa has seen the fastest pace of production in the last decade. In terms of absolute change in production, Asia-Pacific continues to lead the market with an increase in production from 16.77 mmty in 2003 to 27.703 mmty in 2013, at Compound Annual Growth Rate (CAGR) of 5.1% in the last decade. New plants in China and India will continue to drive production in the region to 35.72 mmty in 2018.