US chemical profile: Polypropylene

09 July 2010 00:00  [Source: ICB]

USES
Polypropylene (PP) is used in a wide range of consumer and industrial products. Three forms of PP can be produced: isotactic, syndiotactic and atactic. Isotatic PP is the main form manufactured.

The largest outlet is injection molding applications, which include packaging, parts for electronic and electrical appliances, caps and closures, toys, luggage and a variety of household goods. The second-largest outlet is in fibers, where carpet face yarn for carpet backing has been a growth market for PP.

SUPPLY/DEMAND
In the US, all PP application sectors grew by 3.5%-6.5% between 2005 and 2009. Demand grew by an estimated 7.62m tonnes in 2005 to 9.07m tonnes in 2009. US PP exports reached 2.00m tonnes in 2007, reflecting a 28% increase over 2006, when exports reached 1.56m tonnes.

PRICES
US PP prices are expected to hold steady or drop slightly in July, on the basis of firm feedstock costs, market sources reported during the week ended July 2. PP plunged by roughly 20 cents/lb during May and June. The market was said to be nearing a floor and further steep drops were considered unlikely.

Domestic homopolymer bulk injection/raffia PP was at 6670 cents/lb ($1,455-$1,543/tonne, €1,152-€1,222/tonne). Export prices for bulk injection/raffia PP were 57-59 cents/lb bagged material, free on board (FOB) US Gulf (USG). Sellers of feedstock propylene targeted a rollover for July contracts, while some resin converters hoped the propylene/PP chain would slide by another 2-3 cents/lb.

TECHNOLOGY
Current bulk technologies, like the Spheripol process developed in 1982 by Himont (later Basell, now Netherlands-based LyondellBasell) and the Borstar bimodal polyethylene (PE) process developed in the mid- 1990s by Austria-headquartered Borealis, replaced the solvent in an older process with liquid propylene. Catalyst activity from the older process was also improved, allowing for the introduction of gas phase technology.

Work is underway to develop the use of metallocene catalysts in PP production. The goal is to improve the properties of the resins. Commercial quantities of these resins are being made available by producers, although commercialization has been slow. A 2001 agreement between the then Basell and US oil major ExxonMobil was established to accelerate metallocene PP technology.

OUTLOOK
The US is expected to lose its major export position as new PP capacity comes on stream in the Middle East and Asia. It also faces challenges in the supply and price of the propylene feedstock. Propylene prices strengthened in June, while PP prices continued to drop.

Approximately half the propylene used in US petrochemicals comes from fluid catalytic cracking units at refineries producing gasoline, but propylene demand is growing faster than gasoline. There is concern that refineries may not be able to keep up with demand. In late June, one large PP buyer noted that spot resin availability had lessened.

US POLYPROPYLENE CAPACITY, '000 TONNES/YEAR
Company Location Capacity
LyondellBasell Lake Charles, Louisiana 460
Bayport, Texas 545
ConocoPhillips Linden, New Jersey 350
Dow Chemical Seadrift, Texas 135
Freeport, Texas 250
ExxonMobil Baton Rouge, Louisiana 400
Baytown, Texas 127
Baytown, Texas 274
Baytown, Texas 300
Flint Hills Resources* Longview, Texas 350
Formosa Plastics Point Comfort, Texas 320
Point Comfort, Texas 350
INEOS Carson, California 250
Chocolate Bayou, Texas 650
Deer Park, Texas 190
Phillips Sumika Polypropylene Pasadena, Texas 365
Pinnacle Polymers Garyville, Louisiana 410
Braskem (formerly Sunoco's PP business) Marcus Hook, Pennsylvania 350
LaPorte, Texas 390
Neal, West Virginia 210
Rextac Odessa, Texas 95
Total Petrochemicals LaPorte, Texas 1,224
TOTAL 7,995

*Also has a small co-polymer plant in Marysville, Michigan, but capacity is not confirmed
SOURCE: ICIS PRICING AND ICIS PLANTS & PROJECTS

Profile last published August 14, 2006

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By: Feliza Mirasol
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