Senior reporter Frank Esposito gathered these items at the World Petrochemical Conference, held March 21-22 in Houston.
Economy problems could dog plastics
A number of economic factors could hurt consumer demand and affect plastics usage in 2007.
``I'm concerned with the crackdown on subprime lending,'' said Kevin Swift, chief economist with the American Chemistry Council in Arlington, Va. Slow markets for automotive, residential construction, appliances and furniture add up to a 45 percent chance of a hard landing for the U.S. economy.
``If flexible packaging is down, that would have an impact,'' he said. ``One of my colleagues recently told me 4 billion pounds of polyethylene walks out of Wal-Mart every year.''
Styrene to survive without PS growth
Analyst Vince Sinclair with Chemical Market Associates Inc. in Houston sounded like a grief counselor when speaking about the polystyrene market's decline.
``It's as if polystyrene had died and left styrene monomer alone,'' he said. ``[PS] hasn't ceased to exist; it's growth that has died.''
Prices have surged because of high feedstock prices, sending users to less-expensive materials.
``If polystyrene had 4.5 percent growth, styrene monomer operating rates would be around 94 percent, but the reality is they're at 89. Five percent may not seem to like a lot, but in commodity chemicals it's the difference between rags and riches.''
In 1996, PS made up 52 percent of world demand, but that share is projected to drop to 40 percent by 2011. He said PS should see average annual growth of 1.8 percent from 2005-2011; other derivatives should average 2-5 percent.
PET demand to grow faster than capacity
Even with a wave of new capacity, PET demand may outpace capacity growth in the near future.
Chemical Market Associates Inc. analyst Simon Moorhouse expects global PET demand growth to average 7.2 percent annually from 2006-11 - ahead of the 4.5 percent rate at which capacity will be added. As a result, global operating rates are expected to increase, he said. World PET capacity was estimated at almost 35 billion pounds last year.