GALVESTON, TEXAS - The market for metallocene and single-site-catalyzed polyolefins just might be able to escape the impact that slumping resin demand has had on most commodity markets.
In spite of a down year in polyethylene demand and a flat year in polypropylene demand, metallocene/single-site versions of those materials are expected to combine for a 20 percent annual growth rate between 2001 and 2006, according to Bill Vernon, vice president of Houston's Chemical Market Resources Inc. consulting group.
Vernon - who spoke at his firm's Flexpo 2001 conference, held August 21-23 in Galveston - estimates global m/SSC polyolefin demand will hit the 2.7 billion-pound mark in 2001, representing about 2.3 percent of the world total. In North America, demand for the materials will be almost 1.2 billion pounds, representing about 2.5 percent of the region's overall demand.
M/SSC linear low density PE will account for about 65 percent of total m/SSC demand with m/SSC PP constituting 10.5 percent. In North America, the mLLDPE portion drops to about 60 percent, while mPP's share climbs to 18 percent.
The remainder of m/SSC demand comes from grades of high density and medium density PE and from plastomers and elastomers, which Vernon described as ethylene-based copolymers.
While the m/SSC numbers are up significantly in the past five years, they're still not where polyolefins makers would like them to be, based on the amount of investment and the nearly 15 years spent developing and marketing the materials.
``If you're going to grade the last 12 months, the [m/SSC] industry would get a passing grade but not an `A','' said Vernon. ``It's been a year of continuous development beyond the established players.
``There's been a good growth rate, and we expect to see that for the next several years.''
Others entering a market that to date has been dominated by Dow Chemical Co. and ExxonMobil Chemical Co. include:
* Atofina Petrochemicals Inc., which produced commercial-scale runs of mLLDPE and mLDPE in La Porte, Texas.
* Chevron Phillips Chemical Co. LP, which produced commercial-scale runs of mPE in Cedar Bayou, Texas. The firm used technology licensed from Dow and British Petroleum but reportedly will no longer use the license since material produced didn't differ much from other materials in the market.
* Equistar Chemicals LP, which produced more than 200,000 pounds of mPE during a four-day trial in Clinton, Iowa.
* Univation Technologies, the joint licensing arm of ExxonMobil and Dow, also reached technology agreements with Sumitomo Corp. of Tokyo, Borealis A/S of Finland and Atofina, while selling licenses to Titan Polyethylene of Malaysia and Rio Pol¡meros of Brazil. As part of Dow's 2000 merger with Union Carbide Corp., Univation is continuing to license ExxonMobil's Exxpol metallocene technology for use with Union Carbide's Unipol production technology.
Globally, 92 percent of mLLDPE is sold into film applications, while fiber uses account for 61 percent of mPP sales.
``Film applications are still huge,'' Vernon said. ``That's where the value is in these materials.''
Doug Selman, vice president of research and development for Houston-based ExxonMobil Chemical, said that Vernon's projections probably are accurate ``on a world view,'' but Selman added that ``each company has their own internal growth rates.''
He declined to identify a separate mPE/mPP growth rate for ExxonMobil.
Recent settlements in patent fights surrounding m/SSC technology should help the market, Selman said.
``There's been a lot of clarification and a lot of things straightened out,'' he said. ``With cross-licensing, a lot of companies have gained the freedom to operate. That's got to be reassuring to customers.''
Bruce Story, Dow's intellectual asset director, said he was not sure what impact peace on the patent front would have on sales, but he speculated that mPE's concentration in food-packaging film may be allowing it to avoid the slump that commodity polyolefins are struggling through.
``Food packaging isn't as affected as other markets,'' he said.
Story added that increased licensing and cross-licensing should grow the market and increase long-term m/SSC demand.
Joseph Schardl Jr., PP market development manager at Atofina, said the 8 percent annual growth that Vernon projected for mPP from 2001-06 may be low.
``Growth in that market could be as high as 15 or 20 percent a year,'' Schardl said.