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Polypropylene resins, along with polyester resins (PET), are one of the fastest-growing categories of commodity thermoplastic resins in the world, surpassed only by LLDPE. The United States and China now represent more than 15% and 22%, respectively, of world polypropylene consumption, nearly three times the level of the next largest consumers, Japan and Germany.
Polypropylene (PP) consumption patterns vary from region to region depending on the structure and balance of end uses in their industries. In general, injection-molding applications tend to account for a major proportion of PP consumption in industrialized countries, especially those with domestic automotive and appliance industries. In agricultural countries in early stages of industrial development, fiber applications dominate because of the demand for agricultural bags, sacks, tarpaulins and other exterior applications. Film markets are often the slowest to develop, reflecting the sophistication of packaging in existing domestic industrialized markets.
The following pie chart shows world consumption of polypropylene resins:
Durable goods such as motor vehicles, appliances and carpets account for about 50% of PP end uses in the industrialized areas of the world. Consumption in these markets is the most dependent on economic cycles and consumer hard goods spending. Packaging, another major market for PP, is often considered recession-proof in comparison with other PP end uses with regard to pull-through demand. However, inventory swings along packaging’s substantial supply chain can play havoc with production demand, particularly during long down-market swings such as those experienced over 2000–2003. In the long term, the packaging market is vulnerable to possible legislation mandating the use of recycled plastics and source reduction.
Currently, there are over twelve major producers operating in forty countries with capacities exceeding one million metric tons of PP. Worldwide there are 123 PP producers. Although production capacity remains concentrated in developed regions and countries such as North America, Western Europe and Japan, new producers have started up in other parts of the world, particularly in Asia and the Middle East, during the last decade. Sabic has expanded to become a multiregional player through its acquisition of DSM and, more recently, Huntsman in Europe. Total has consolidated its ATOFINA business and is a competitive force in Europe and North America.
While new applications continue to develop for PP, it is still largely a commodity chemical that is subject to economic fluctuations especially in durable goods. Producers continue to struggle with sustaining profitability, where cost volatility often undercuts the ability to recover pricing in tightly supplied markets. Competitors have consolidated, formed joint ventures and alliances in order to secure feedstock, and pursued broader commercial positions and/or technologies to streamline and hopefully reduce the profit volatility of their businesses.
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