17/03/13

Polypropylene-14/08/2006-CMR

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Polypropylene 14 August 2006 00:00 [Source: IC B Americas] POLYPROPYLENE DEMAND 2004: 16.1 billion pounds 2005: 16.8 billion pounds 2009: 20.0 billion pounds, projected. Demand equals production plus imports (2004: 726 million pounds 2005: 655 million pounds) less exports (2004: 3.8 billion pounds 2005: 3.9 billion pounds). GROWTH Historical (2000-2005): 2.8% per year. Future: 4.5% per year through 2009. PRICE Historical (2000-2005): High, 80.6 cents per pound g.p. homopolymer, t.l., frt. alld. Low, 32.5 cents per pound, same basis. C urrent: 65 to 68 cents per pound, same basis. USES Injection molding, 35% distributors and compounders, 28% fiber and filament, 22% film and sheet, 8% blow molding, 2% other, including wire and cable, 5%. MARKET PERSPECTIVE Polypropylene's intrinsic properties of high stiffness, good tensile strength and inertness toward acids, alkalis and solvents , plus its cost advantage over other thermoplastic polymers, has secured its position in a wide range of consumer and industrial products, manufactured by several high-volume forming methods. Injection molding accounts for 35% of PP demand. The thermoplastic has a wide range of melt flows which has led to significant growth through product substitution of many plastics, including high-density polyethylene , polystyrene , polyvinyl chloride and acrylonitrile butadiene styrene (ABS) resins. PP also substitutes for nonplastic materials as well, such as metal and glass. PP and its alloys have become the plastic of choice in the automobile market where it can provide substantial weight savings. It is used in internal and external body panels and its heat resistance makes it suitable for use for components in the engine compartment. PP's very low density, combined with good mechanical properties (especially when filled or compounded) and good injection-molding characteristics make it very suitable for the large-volume cost- and weightconscious automotive market. Over a third of plastics in automobiles are now PP and PP alloys. PP prices in the US retreated during the 2001 recession, but steadily increased from 2002, in line with higher propylene costs, hitting a peak above 80 cents per pound last November and December. Some of the 2005 increase was due to Gulf C oast outages caused by Hurricane Katrina. Since then, pricing has come down to the mid- to high 60 cent range. OUTLOOK Polypropylene is the world's fastest-growing commodity resin. But right now propylene, the precursor to polypropylene is in a tight supply situation, and is likely to remain so. When crude oil prices rise, the alkylation value of propylene likewise increases and at some point, refineries pull propylene out of the chemical market to use in gasoline, leading to shorter supply and higher prices. New overseas PP capacity additions for the remainder of the decade, more than 40 billion pounds, will exceed global demand growth. The likely result will be that by the end of the decade, the US, now a net exporter, will reverse and become a net importer of PP polymer and resins. All PP application areas are forecast to grow from 3.5% to 6.5% per year for the foreseeable future. Aggregate growth is estimate to be 4.5% per annum for the forecast period. *Millions of pounds per year of polypropylene (PP) resin, mostly from bulk (liquid-phase) or gas -phase catalytic polymerization processes using polymer-grade propylene monomer.??BP closed its C edar Bayou, Tex., PP plant in 2002, which had an annual capacity of 600 million pounds. In April 2004 BP formed Innovene as a separate entity, which comprised BPs former olefins and derivatives businesses. In December 2005, BP sold Innovene to Ineos, a UK-based private chemicals company. Following the acquisition, Ineos created seven new business units, including Ineos Olefins & Polymers, USA, which included all of Innovenes North American olefins, polyethylene and polypropylene business activities.??Epsilon Products C ompany is a 50/50 joint venture between Sunoco. and BAR-L. Sunoco markets the polypropylene product.??Formosa Plastics added 140 million pounds of capacity to its PP plant in Point C omfort, Tex. in 2004, raising its total PP capacity at the site to 1,640 million pounds. ??Phillips Sumika Polypropylene C ompany is a 50/50 joint venture between C hevron Phillips C hemical C ompany and Sumika Polymers America, a wholly owned subsidiary of Sumitomo C hemical C ompany (Japan).??In March 2003, Sunoco acquired Equistar C hemicals 400 million pound Bayport PP plant in Pasadena, Tex.??PROFILE LAST PUBLISHED 11/5/01; THIS REVISION, 8/14/06.

Basell USA, Bayport, Tex. Basell USA, Lake C harles, La. C onocoPhillips, Linden, N.J. Dow C hemical, Freeport, Tex. Dow C hemical, Norco, La. Dow C hemical, Seadrift, Tex. Epsilon, Marcus Hook, Pa. Equistar C hemicals, Morris, Ill. Exxon Mobil, Baton Rouge, La. Exxon Mobil, Baytown, Tex. Formosa Plastics, Point C omfort, Tex. Huntsman, Longview, Tex. Huntsman, Marysville, Mich. Huntsman, Odessa, Tex. Ineos Olefins & Polymers USA, C arson, C alif. Ineos Olefins & Polymers USA, La Porte, Tex. Phillips Sumika Polypropylene, Pasadena, Tex. Pinnacle Polymers, Garyville, La. Sunoco C hemicals, Bayport, Tex. Sunoco C hemicals, La Porte, Tex. Sunoco C hemicals, Neal, W.V. Total Petrochemicals, La Porte, Tex.

1,300 1,000 750 550 500 300 800 280 600 1,800 1,500 660 175 260 450 850 750 800 400 940 450 2,200

Ineos Olefins & Polymers USA, C hocolate Bayou, Tex. 1,410

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TOTAL 18,725

Polypropylene-14/08/2006-CMR

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