A new report from GlobalData has said that global polypropylene capacity increased at a Compound Annual Growth Rate (CAGR) of 5.2% from 2003, and hit 65 million tpy in 2013. GlobalData expect a continued rise to 86 million tpy by 2018, at a slightly higher CAGR of 5.8%. The company’s new report also states that China and Russia will be the leading contributors to future polypropylene capacity increases, and will account for a combined 45% of global additions over the next five years.
Carmine Rositano, Managing Analyst, Downstream Oil and Gas, GlobalData said, ‘a demand side push is driving additional capacity in China, forcing it to produce more domestic polypropylene. Indeed, China will lead new global polypropylene capacity increases over the next five years, as its goal of self sufficiency drives 7.48 million tpy of additions, of which 97.6% will come from new plants and the remainder from the expansion of existing facilities.’
GlobalData has said that China will account for 62.4% and 35.5% of planned Asian and global capacity additions in by 2018, respectively. Russia is expected to be the second largest contributors 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.
Rositano explained, ‘until 2012, Russia’s polypropylene capacity was only 0.65 million tpy but this increased to 1.33 million tpy in 2013 and is further expected to reach approximately 3.48 million tpy by 2018, with all additions coming from new plants.’
GlobalData’s report also says 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.
Adapted by Claira Lloyd
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