ATLANTA—Polypropylene, polyethylene and nylon should enjoy strong growth as the world moves past 2000, while challenges from environmentalists remain a big wild card for PVC, according to analysts and resin company officials.
The experts presented their outlooks at Antec '98 in Atlanta, during an April 27 session sponsored by the Society of Plastics Engineers' Marketing and Management Division.
Prices for ethylene, used to make PE, should retreat as operating rates decline from 1997-99, according to Rob Harvan, director of chemical planning at Bonner & Moore Associates Inc. of Houston.
``What we see is that ethylene operating rates will likely move lower in the next 13-18 months,'' Harvan said in his technical paper.
The analyst thinks the U.S. economy will enter a recession before the end of the decade, reducing demand at a time when significant new ethylene capacity will be into operation.
More upbeat was Paul Ita, senior research analyst at Freedonia Group Inc. of Cleveland, who examined PE. Although Ita acknowledged that the large amount of capacity scheduled through 2001 ``has raised fears of rampant overcapacity, these fears appear unfounded based on currently available data.'' Still, he said, ``Overcapacity may become an issue if the industry announces many more expansions by the first half of 1998.''
Ita predicts global PE production will increase 5 percent a year, to 108 billion pounds in 2001, thanks to growing packaging markets, a healthy construction market for high density PE pipe and conduit and motor vehicle fuel tanks. Packaging is the biggest PE market, accounting for 60 percent of total production, he said.
Ita's paper was written from a Freedonia study published in July 1997.
PP should continue to be the world's fastest-growing thermoplastic resin for the decade, said Russell DeLuca, vice president of sales and marketing at Amoco Polymers Inc. of Alpharetta, Ga.
``The opportunity for PP to grow is very dramatic in all parts of the world,'' DeLuca said.
The Asian slowdown could dampen PP demand — but not by much, he said.
Driving the market will be new process and catalyst technology and additives, and new markets.
Since 1990, PP use has grown 9 percent a year. DeLuca pegs future growth at about 7 percent.
His Antec paper said U.S. demand grew by 7 percent, but DeLuca told his Antec audience the rate turned out to be much higher than that, thanks to new resins and versatile markets, such as automotive exterior fascia, food packaging, bottles, nonwovens and containers for prepared foods.
The auto market should continue to grow, but the emphasis will shift from talc-filled grades and low-impact copolymers.
``There will be a lot more fascia [applications] and a lot more interior parts made [from PP] than in the past,'' DeLuca said.
China will remain a net importer of PP resin through 2005, even as new resin plants begin production there, he said.
Donald Goodman, manager of technical products at Occidental Chemical Corp.'s Vinyls Division, said PVC's rate of growth depends on how aggressively the industry develops new technology and whether environmental attacks succeed.
Goodman, who is based in Pottstown, Pa., recapped the Vinyl Institute's Vinyl 2020 report, which shows several scenarios. The most optimistic projects vinyl growing from $18 billion to $61 billion in 2020. But another scenario, which includes severe environmental restrictions, places the value at only $23 billion by 2020.
Goodman said strong construction demand from developing countries will mean those countries' demand will grow the fastest, at nearly 7 percent a year.
Nylon should continue to grow in automotive under-the-hood uses, according to Austin Peppin, president of Peppin Associates Inc. of Chesterfield, Mo.
About 40 percent of all nylon goes into automotive.
``There's still a lot more metal to replace,'' he said.
The emphasis is on nylons that resist high temperatures. One major new application: intake manifolds. Nylon also will get a boost from an explosion in electronic equipment and packaging. The material has enjoyed average yearly growth of 12 percent since 1991.
Tight supply remains the top nylon issue. In the past two or three years, increased demand for nylon fibers and engineering resins has strained capacity for the raw materials that make nylon, Peppin said. Shortages, even in the face of capacity expansions, caused prices to firm up in late 1997. He thinks some nylon grades will remain tight through the rest of 1998 and into next year.
Prices should increase, he said.