Global polyolefins operating rates to fall in 2009 - ChemSystems

02 March 2009 17:31  [Source: ICIS news]

LONDON (ICIS news)--Global polyethylene (PE) and polypropylene (PP) operating rates will fall considerably in 2009 compared with 2008 as demand remains constrained, consultants ChemSystems said on Monday.

Demand is expected to improve slightly over 2008 but is not expected to return to 2007 levels even in mature economies.

The steep inventory correction towards the end of the year helped push global polyolefins consumption for 2008 down by 1.6% compared with the 3% growth in global economic output, the consultants said.

“This small increase in demand will be dwarfed by new capacity additions coming on stream in the Middle East and Asia,” it says in a new Polyolefin Planning Service (POPS) report.

“We expect the period after 2009 to 2012 to be one of marked producer weakness as a consequence of weak demand growth, the poor economic environment and these very large capacity additions. It is very likely that the industry will be forced to consolidate production to sustain economic operation during this period,” it adds.

Global trade patterns are also expected to shift as the US and western Europe become net importers of linear low density polyethylene (LLDPE), high density polyethylene (HDPE) and PP.

For more on PE and PP visit ICIS chemical intelligence
Click here to find out more on the European margin reports
To discuss issues facing the chemical industry go to ICIS connect

By: Nigel Davis
+44 20 8652 3214

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