МОSCOW (MRC) -- A surge in new plastics capacity coming from low-cost producers in North America, the Mideast and China is driving the global market for polyethylene (PE) and polypropylene (PP) to oversupply, which will pressure margins for producers and change the global competitive landscape, said Chemweek.
IHS estimates that more than 24 million m.t. of new PE capacity will be added globally during the 2015 to 2020 timeframe –more than one-third of that, approximately 8 million m.t., will come from the United States, which will significantly increase the US net-export position for PE and PP and other chemicals, rebalancing the global chemical trade flows that have favored the Mideast for decades.
Beyond North America, China is also growing its influence as a key, low-cost provider of PE, thanks to its production additions from coal-to-olefins technology, Vafiadis said. China is expected to add approximately 17 million m.t. of new PE/PP capacity during the next five years, which will drive further market volatility, according to IHS.
In Europe, imports of PE into Europe from the Mideast in 2016 have surpassed 2015 numbers as the region continued to see strong demand and offered attractive net-backs for Mideast producers, IHS says. High-density polyethylene import figures for January and February 2016 overall, were the highest of the last eight years at 148,000 m.t., and exports were lowest for the same period at only 42,000 m.t. IHS says a similar, but less pronounced, trend is occurring for other PE grades as well.
These market realities will also drive much of the conversation when major industry executives, along with other leading IHS experts, speak at the PEPP 2016: 24thAnnual Polyethylene/Polypropylene Chain Global Technology and Business Forum taking place 1-3 June 2016, at the Swissotel Zurich. The industry’s leading event will feature more than 25 IHS and industry experts from across the PE/PP supply chain and will explore polyolefin technology developments and new applications, additives and compounding, trends in packaging requirements, as well as the outlook for distribution and logistics. More than 150 attendees are expected from approximately 75 companies and nearly 25 countries, including resin producers and distributors, catalyst and process technology providers, R&D professionals, converters, brand owners and retailers.
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