Spring is in the air, and Chuck Platz - president of polypropylene leader Basell North America - was talkin' baseball.
That's not necessarily a good thing, since Platz quoted Casey Stengel, manager of the 1962 New York Mets, widely recognized as one of the worst teams ever.
``Stengel said, `Can't anybody here play this game?' '' Platz said at the DeWitt World Petrochemical Review. ``Well after 2001, you could say, `Can't anybody play this polypropylene game?'
``I can't imagine any polypropylene maker made money last year,'' he added. ``It looks like we all struck out.''
Widespread overcapacity, combined with lower-than-expected growth, combined to drive PP prices down and push profit margins into negative territory. Although some capacity has been idled, Phillips Petroleum Corp. is set to fire up 700 million pounds more in Linden, N.J., later this year.
The Linden plant, originally announced as a joint venture between Tosco Corp. and Union Carbide Corp., will be the last in a round of refinery-based expansions that have hurt the industry, according to Platz.
Refinery-based projects have decreased the industry's overall operating rates 3-4 percent, according to Basell research.
``A number of players entered the market saying, `How difficult can it be? I can buy technology and use my feedstock position to make money,' '' Platz said. ``But they didn't really understand the industry.''
But such projects could resurface in the future, according to DeWitt President Earl Armstrong.
Armstrong anticipates there could be PP projects in the Midwest, East Coast, West Coast and various parts of Canada.
``Producers are moving to where the propylene is,'' Armstrong said. ``That way you don't have to move propylene to the Gulf Coast, which could save you as much as 3 cents a pound on freight costs.''
Early-year price increases have been partially successful. Graham Harris, a consultant with Houston-based Chemical Market Associates Inc., said the industry has begun to bounce back from one of its deepest-ever troughs and should hit 90 percent operating rates by 2004. CMAI also expects U.S./Canadian demand to grow an average of almost 8 percent in 2002-03.
Basell's Platz, a 30-year industry vet, also sees things picking up, with PP taking market share from high density polyethylene in injection molding and from polystyrene in sheet applications.
``I'm a relentless optimist about this,'' he said. ``Either that or I'm a slow learner.''