Chemical Guide

With the global economy starting to recover in the second half of 2009, the polypropylene (PP) usage level will reach 2007 usage levels sometime in 2010. Global polypropylene usage growth will average 3.7% per year for the next five years.

Polypropylene industry is witnessing emergence of new PP companies, and the change of roles on the market. Most of the new players are companies headquartered in the Middle East, particularly in Saudi Arabia. Global capacity utilization rate is expected to be as high as 80-85%. Europe and the US are demonstrating impressive capacity utilizations, as a large numbers of polypropylene plants owned by the major players are recording 100% capacity utilization rates. Key players in the marketplace include Basell Polyolefins, Borealis A/S, Innovene, Dow Chemical Company, Equistar Chemicals, Exxon Mobil Chemical Co., Reliance Industries Ltd., Saudi Basic Industries Corporation (SABIC), Sunoco Chemicals etc.

It is notable that production of polypropylene and polyethylene in most countries will be unable to compete with the Middle East production as feedstock costs of the Middle East producers are barely 20% of the cost of feedstock available to Asian and European producers.

Along with motor vehicles, appliances and carpets, packaging is a major market for PP. Modern industrial polypropylene packages have high technical characteristics of durability, elasticity, ease, safety and the maximal convenience in use. Main sectors responsible for PP bag consumption include the packing of the following items: cement, flour, mineral fertilizers.

A Flexible Intermediate Bulk Container – FIBC, big bag, bulk bag, or super sack – is a standardized container for storing and transporting in large volumes (used for example for sand, fertilizers, granules of plastics or other dry products storing). It is frequently made of thick woven polyethylene or polypropylene.

During the last ten years flexible intermediate bulk containers (FIBCs, Big-Bags) ousted other kinds of packages for bulk transportation and storage. At present, FIBCs are generally recognized as a universal bulk packaging since they can be easily adapted to any handling machinery, filling and discharge stations.

The use of such bags has a number of advantages that allow to minimize the possible financial expenses during the transportation, due to the absence of hand work on each stage of loading.

Packaging (FIBC) market is often considered recession-proof in comparison with other PP end uses with regard to pull-through demand. However, inventory swings along packaging substantial supply chain can play havoc with production demand, particularly during long down-market swings. In the long term, the packaging market can be vulnerable to possible regulations mandating the use of recycled plastics and source reduction.

More information on Polypropylene FIBC market may be found in the report Polypropylene Flexible Intermediate Bulk Containers (Big Bags) Market Research recently published by TD The Market Publishers, Ltd.