04 May 2011 21:44 [Source: ICIS news]
BOSTON (ICIS)--Polypropylene (PP) prices will eventually settle back to more typical levels, but not until North America and Europe have become net importers of the resin by 2015, a consultant said on Wednesday.
"Imports of resins may be necessary to break the current high-cost propylene cycle and balance the market," said Howard Rappaport, global business director of plastics for Chemical Market Associates Inc (CMAI).
Rappaport was speaking at the Society of Plastics Engineers (SPE) annual technical conference (ANTEC).
The imports will come from the Middle East, where PP exports will likely double by 2015.
"Eventually PP prices will re-align with historical levels," said Rappaport, but currently "more and more PP contracts are tied to propylene prices".
Prices may continue to rise since, in addition to the price of crude oil, globally this is "the lowest production of propylene seen since [the mid- to late-] 1980s," he added.
Global PP capacity in 2002 was 37.16m tonnes and is expected to rise to 73.73m tonnes - mainly in the Middle East.
In 2010, global demand for PP was 48.1m tonnes, Rappaport said, with 35% going towards injection moulding, 23% to film and sheets and 14% to fibre.
SPE's ANTEC takes place in Boston from 1-4 May.
For more on PP visit ICIS chemical intelligence
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