CMAI: Polyolefin demand to grow 6-8%/year


By the OGJ Online Staff


HOUSTON, Mar. 26�World demand for polyolefins is expected to grow 6-8% a year until 2005, according to Chemical Market Associates Inc.'s 2001 World Polyolefins Analysis.

That figure is 1.5-2.5 times world gross domestic product for the same period, said Houston-based CMAI.

A statement by the report's authors said the polyolefins industry "experienced an extraordinary global transition during the 1998-2000 time period. Impacting the industry were such factors as poor economies in Asia, unexpected plant outages, high energy costs in North America, inventory swings from converter to producer, large new capacity, changing trade patterns, and volatile pricing."

The report also predicts per capita consumption of polyethylene and polypropylene resins worldwide is expected to grow for several years. Polyethylene consumption, for example, is expected to grow to 10.6 kg in 2005 from 1999's 8.3 kg.

Per capita polypropylene consumption is expected to reach 6.4 kg in 2005 from 4.8 kg in 1999.

CMAI said, "Polymer production facilities being built today are significantly larger than they were just a few years ago. The average size of a world-scale plant today ranges from 250,000 to 450,000 metric tons/year. New advances in operating and catalyst technology will allow new and existing facilities to be even more productive in the years to come."

CMAI predicts polyethylene capacity will be brought on stream to meet demand�more than 15.7 million tonnes worth in 2000-2005�as will polypropylene capacity: more than 9 million tonnes worth in 2000-2005.

Polyolefin prices are expected to remain under downward pressure during the rest of 2001 and begin to recover in 2002. Peak polyethylene prices are expected in 2004-2005. Polypropylene prices will recover in 2002, topping out in 2004, predicted CMAI.

"As new facilities start up in Asia and the Middle East, traditional supply roles will change among regions. Between 2000 and 2005, the number of polyethylene and polypropylene facilities coming on stream in the Middle East will significantly increase the amount of material destined for export."

Low linear density polyethlene (LLDPE) and high density polyethylene (HDPE) capacity in the Middle East will almost double and polypropyelene almost quadruple during that time period, said CMAI, adding most of the increased production will find its way into the European and Asian markets.

"Korea will continue to be a significant exporter into China between 2000 and 2005. Within North America, additional polyethylene capacity being constructed in Canada will eventually find its way into the US market during the 2000-2001 time period," said CMAI.

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