Global polyolefin supply may tighten by 2014

22 April 2010 16:56  [Source: ICIS news]

SHANGHAI (ICIS news) –Global polyolefin supply may tighten by 2014 if the global economy grows by 5% each year on average, thereby driving the demand for plastic raw materials, a senior executive at PTT Polymer Marketing Co said on Thursday.

Existing investment in southeast Asia’s polyolefins industry in particular would not be enough to cover regional demand over the next 10 years, as plastic end-product exports from southeast Asia to the US and Europe were expected to increase significantly during that period, said PTT's assistant managing director, Narongchai Pisutpunya.

"If we consider only the demand-supply [dynamics] in the region [southeast Asia], we should not have any more investment. But we have to look at the global market as a single market,” he said.

Any shortages in raw materials would hit plastics end-users hard as most of these were keeping low inventories nowadays to optimise their supply chains, Pisutpunya said, speaking on the sidelines of the Chinaplas exhibition in Shanghai.

"Southeast Asian countries are mostly developing economies and hence their demand will be growing not only for their domestic markets, but also for goods exported to other countries,” he said.

"The production costs in some southeast Asian countries are and will be lower than the developed countries,” Pisutpunya added.

The International Monetary Fund had forecast global GDP growth at 4.2% for 2010 and at 4.3% for 2011.

Chinaplas 2010, an international exhibition on plastics and rubber industries, runs from 19-22 April in Shanghai.

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By: Chow Bee Lin
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