China to boost PP capacity by 5.4m tonnes/year

11 January 2007 09:47  [Source: ICIS news]

By Sophia Li

SHANGHAI (ICIS news)--China is projected to boost its polypropylene (PP) capacity by about 5.43m tonnes/year by end-2010 to help ease the supply shortage as demand grows, industry sources said late on Wednesday.

Domestic PP demand is forecast to grow by 6%-8.6% annually in 2006-2010 compared to a projected moderate gross domestic product (GDP) growth of around 8-10% per year, Liao Zhenpin, chairman of the China Plastics Processing Industry Association (CPPIA), said.

Reflecting the supply shortage, China’s PP output was 5.24m tonnes from January to November 2006 while apparent demand in whole country was around 7.8m tonnes, according to official statistics. The 2.6m tonnes gap was filled by imports.

Among the new capacities coming on stream to meet demand are Ningbo Formosa Plastics Corp’s 450,000 tonne/year unit in 2007, Datang International Power Generation’s 500,000 tonne/year line.and Dushanzi Petrochemical’s 550,000 tonne/year plant in 2008.

Others include Fujian Petrochemical’s 450,000 tonne/year plant, Tianjin Petrochemical’s 450,000 tonne/year unit, Shenhua Ningxia Coal Industry Group’s 500,000 tonne/year line, Liaoning Huajin Chemical’s 250,000 tonne/year plant, and Zhenhai Refining and Chemical Co (ZRCC)’s 300,000 tonne/year unit in 2009.

Fushun Petrochemical’s 300,000 tonne/year plant and Guangzhou Petrochemical’s 300,000 tonne/year facility were due to start in 2010, while the launch dates of Shaoxing Sanyuan Petrochemical’s 300,000 tonne/year line, Dalian Shide’s 600,000 tonne/year unit and Yanshan Petrochemical’s 380,000 tonne/year facility are yet to be confirmed.

As these facilities come onstream, China’s PP capacities will reach 10.6 million tonnes in 2010, or nearly double the current supply.

China consumes 44% of globally exported PP and is the world’s biggest polyolefin importer.

While the country will still rely on foreign speciality PP grades such as PP compound and high isotactic PP, import volume is expected to decline post 2009 as China’s PP supply moves from shortage to surplus with the new capacities, local traders noted.

China’s domestic PP capacities had expanded rapidly in the past decade. It expanded 73% to 5.2m tonnes during 2000-2006, and was up 384% from 1995, according to industry statistics.

Jade Xu contributed to this article.

By: Sophia Li
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