Iran's Jam to produce block copolymer PP by Q4 2010

20 April 2010 10:01  [Source: ICIS news]

SHANGHAI (ICIS news)--Iran's Jam Polypropylene Co plans to start producing block copolymer grade polypropylene (PP) by the fourth quarter of 2010, a company source said at the ChinaPlas exhibition in Shanghai on Tuesday.

"Currently, we are producing only random copolymer grade, which constitutes 20% of our total PP capacity of 300,000 tonnes/year," the source said.

The company would increase its output of copolymer grades at its Assaluyeh PP plant to 50% of its total production by early 2011 to improve its bottomline, the source added.

Copolymer PP grades currently fetch a premium of $100-200/tonne (€74-148/tonne) above homopolymer PP grades.

Although production costs are higher for copolymer PP compared with homopolymer grades, the price gap made the shift to copolymer grade worthwhile, the source said.

Homopolymer grades are mainly used in food, fertilizer and cement packaging.

The bullish sentiment in the automotive and consumer durables segments has fuelled strong growth in demand for copolymer PP.

"Demand growth is very strong in markets like China, Turkey and India, which are our key export markets," the source said.

The company exports 80% of its output, selling the remaining 20% to Iranian customers.

"Consumption of hompolymer grades is much higher than that of copolymer in Iran," the source said.

By the first quarter of next year, Jam wants to increase the share of random and block copolymers to 25% each, the source said.

"The remaining 50% will comprise homopolymer grades such as BOPP (bi-axially oriented PP) film and inverted (also known as inflated) PP (IPP) film as well as raffia and injection grade PP," the source added.

ChinaPlas – Asia’s largest annual plastics event – runs from 19-22 April.

($1 = 0.74)

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By: Prema Viswanathan
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