Plastics News reporter Frank Esposito gathered these items at the Chemical Market Associates Inc. and DeWitt & Co. Inc. petrochemical conferences, March 21-23 in Houston.
Asian resin growth bringing challenges
The onslaught of new resin capacity in Asia and the Middle East isn't slowing down any time soon, but producers are facing their own set of challenges.
The region's resin makers are dealing with concerns about retaining skilled workers and with having enough shipping containers to store and transport finished product, said Kamal Nanavaty, president of the cracker and polymers sector for Reliance Industries Ltd. in Mumbai, India.
He added that rising incomes and demand for housing, infrastructure, agriculture and clothing should ensure resin growth for the next 20 years. For its part, Reliance is adding more than 600 million pounds of polypropylene capacity this year and more than 2 billion pounds in 2008.
W. European exports of PE, PP to decline
Western Europe is not expected to be an efficient exporter of polyethylene and polypropylene in the years ahead, said DeWitt market analyst John Cunningham.
High material costs and overcapacity will hurt the region's PE and PP makers, making it vulnerable to imports from low-cost suppliers such as the Middle East, he said. Western European capacity that had been used for export will be used to meet domestic demand.
To survive, Western European firms must focus on product innovation and specialization, and increase their links between specific products and customers, he said.
Ethylene from Asia could flood market
Global ethylene demand should see steady growth through 2012, but major new capacities in Asia could flood the market toward the end of that period.
Between 2006 and 2012, world ethylene demand is expected to average annual growth of 1.3 times global gross domestic product. CMAI market analyst Mark Eramo said PE will account for about 60 percent of ethylene consumption in that time. But he said that major amounts of Asian ethylene capacity, starting in 2009, could drive global ethylene operating rates under 90 percent.
``The amount of potential surplus capacity is unprecedented,'' he said. ``There's too much being built too fast.''
Nylon market adapts, as overall sales grow
Plastic nylon demand is expected to grow dramatically by 2015.
In 2005, standard uses like injection molding accounted for about 30 percent of global nylon demand, said DeWitt market analyst Andy Nicholson. By 2015, that share will be 46 percent, as nylon fiber uses lose market share to lower-priced polyester and PP.
The portion of the nylon market held by textile filament will drop from 27 percent to 21 percent in that period, while industrial filament's share will slide from 18 percent to 15 percent, Nicholson said.
Total nylon demand will grow from 13 billion pounds to almost 18 billion pounds in that span, with nylon 6 grades holding about 60 percent of the market.