Polypropylene is a versatile thermoplastic polymer used as a plastic and as a fiber across multiple industries ranging from packaging to textiles and automotive. According to global polypropylene market price trends, the overall market value is expected to reach $115 billion by 2022, estimated to grow at a CAGR of 5 percent. The market is projected to be led by demand in developing markets of Asia while the demand for polypropylene is expected to slow down in the markets of North America and Europe.
There are several properties of polypropylene that contribute to its high demand, such as chemical resistance, fatigue resistance, insulation, elasticity, lightweight, and transparency. Due to its resistance to chemical contamination, polypropylene is an ideal material for packing in the food and beverage industry and is also microwave and dishwasher friendly. As polypropylene is thermoplastic, it is recyclable and can be melted to form a different shape as required.
The manufacturing of polypropylene takes place by the polymerization of propene for which there are three manufacturing processes used at an industrial scale, namely, hydrocarbon slurry or suspension, bulk slurry and gas phase. The process is chosen based on the grade and quality of polypropylene needed.
The final costs of polypropylene are dependent on the expenses incurred in the manufacturing process, which include costs of feedstock, raw material petrochemicals, natural gas, and oil. The prices of oil and natural gas specifically are prone to fluctuation based on global dynamics and supply, which therefore affect the price of polypropylene as well.
Demand for Polypropylene
There is an immense demand at a global level for polypropylene, which is the second most widely used commercial plastic. Based on end-user segmentation, the demands for polypropylene can be identified as packaging, construction, consumer products, electrical & electronics, and automotive, with the packaging industry accounting for the largest market.
Other applications of polypropylene are evolving, such as the use in medicine as surgical sutures and meshes, which are expected to further drive the demand for polypropylene. A rise in disposable income and industrial applications of polypropylene in developing nations are also expected to contribute to the demands.
The major global suppliers of polypropylene are North America, Asia, and MEA, while LATAM and Europe have a comparatively lesser output. The global polypropylene market is considered to have surplus capacity in the Middle East and North America, while the demand is expected to witness a sharp increase in Asia.
China is considered to be moving towards a self-sufficient polypropylene supply model, by improving feedstock supply and cheaply available propane and coal, resulting in lower prices and stiffer global competition. Although the supply of polypropylene is increasing at a steady pace, it is yet to meet the growing demands at a global level.
Engagement models employed by polypropylene suppliers include direct buying and consortium buying, fixed contracts and multi-year contracts. Direct buying is preferred more by large volume buyers, for example for use in consumer products, while smaller buyers prefer the consortium buying model.
The versatility, usefulness and recyclable nature of polypropylene have made it a popular alternative to traditional materials such as metals, glass, and other polymers. Polypropylene is used across several industries, including packaging, food & beverages, carpets, textiles, industrial gear, and automotive. The rising demand for polypropylene as well as the supply and costs involved in manufacture are expected to influence the present polypropylene market price.