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Your present location:Home >> Industry News >> Chemical Market Associates Completes 2011 World Polyolefins Analysis

Chemical Market Associates Completes 2011 World Polyolefins Analysis

Number of visits: Date:2010-10-19 15:46


Chemical Market Associates, Inc. (CMAI) announces the completion of the 2011 World

Polyolefins Analysis,
      an annual global study that covers historical trends and future projections for supply,

demand, production, capacity, trade, pricing and profitability of the global Polyethylene

(PE) and Polypropylene (PP) industry for the period 2005 to 2015.

Current Market Situation

Polyolefin demand growth resumed during the second half of 2009 with the onset of the

economic recovery phase. Emerging market economies and China, in particular, provided the

main support for the renewed expansion in the global polyolefins market as reflected in the

dramatic increase of Chinese polyethylene and polypropylene imports that is now abating.

On the supply side, capacity rationalizations and delays in the start-up of several major

new petrochemical complexes in the Middle East further moderated the deterioration in the

global supply/demand balance. In fact, operating rates remained in the low 80 percent range

despite still massive capacity additions. Profitability in 2009, on average, even

registered a small increase over the corresponding 2008 levels, which also benefitted from

producer discipline in managing the supply side. The situation in 2010 continues to

improve, although the pace varies greatly among regions.

Market Outlook

Growth in polyolefin consumption will continue to be driven mainly by the rapid economic

development of numerous transition countries in the Asia Pacific region, Central Europe,

the Middle East and South America. Investments in export-oriented plastics converting

capacities in many of these countries will also help fuel polyolefin resin demand growth.

Benefits deriving from the resumption in demand growth, however, will be largely offset by

the current wave of capacity additions. Although concentrated in Asia and the Middle East,

the start up of several world-scale polyethylene and polypropylene complexes between 2009

and 2011 will likely keep global operating rates at a low level in the near term. Toward

the middle of the decade, plant utilization will gradually increase, as the market absorbs

the surplus capacity.

The persistence of adverse market conditions generally is preventing any meaningful

increases in profitability in the near term. In fact, polyolefin cash margins on average

are forecast to remain at, or even below, the current depressed level over the next two to

three years. However, profitability among individual polyethylene producers will continue

to vary greatly based on feedstock type and geographic location.











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