Global Polypropylene Market Forecast Hurt in 2020 But Still Strong
After suffering from losses in 2020 and deviating from its consistent growth pattern, the global polypropylene market is looking to come back strong.
The pandemic affected the global polypropylene production process, and the market saw a drop of 6 percent year-on-year. For the global polypropylene production process, the capacity was at 88.6 million MT, and demand at 75.3 million MT in 2019. Per forecast, the growth is expected at a CAGR of 2-3 percent during the 2019-2024 period. This rate has slowly come down because of the pandemic, which shut down industries all across the world. But, now, with the world slowly starting to function at its previous pace, the global polypropylene market is expected to jump from $84 billion in 2019 to $95 billion in 2024.
The industries that require polypropylene production are the CPG segment, which includes containers for food and others, caps, closures and films, etc. Auto components like bumpers, door panels, internal structures, and dashboard carriers also use polypropylene. The global capacity for PP resin, which was 88.6 million MT in 2019, is expected to reach 108.6 million MT in 2024. The global demand for PP was 75.3 million MT in 2019, and is expected to rise to 84.4 million MT in 2024.
When it comes to the U.S. and Europe, the polypropylene market is consolidated. The pandemic broke out and now it might become constrained. However, if the demand remains bearish, it could prevent any major impact on the industry. In 2020, the global polypropylene production market is thought to have suffered a low of 5-6 percent.
- Due to the pandemic, the global PP resin market saw estimated destruction of 5-6 percent Y-o-Y in 2020. China was the only country that saw a positive growth demand.
- When it comes to the total growth of polypropylene, it has come down, because most industries are cutting down on the use. The construction, automotive, and non-essential commodities that suffered significant losses in 2020 cut down on their use of polypropylene. But one segment utilized polypropylene resin to a maximum --- the medical sector. PP masks that are made of melt-blown fabric were the key driver of demand. The FMCG segment followed next, with its rigid packaging.
- The U.S., Europe, and LATAM have kept their polypropylene capacity at the same levels as the previous year. There have been no additions. Also, they have focused on domestic supply availability, so their numbers have not touched the global figures. For Europe and LATAM, the maximum rate at which they are expected to operate is 85-95 percent.
- The global growth pattern is massively dependent on the Asian market, which is supposed to be a growth driver at about 2.3 percent until 2024. China and India are going to be major players in the arrangement. The consumption in Asia makes for about 59 percent of the global consumption of polypropylene. China is the leader and biggest consumer here.
- The polypropylene production market should function with an on-purpose technology and this will significantly expand capacity in China. This will, in turn, reduce their dependence on the Middle East and all the other Asian countries.
- When it comes to North America, the capacity of PP resin is 8 million MT, the demand is at 6.2 million MT. The demand growth is at a CAGR of 1.9 percent.
- For LATAM, the capacity stands at 3.5 million MT, the demand is higher at 4.3 million MT, and the growth is forecasted at 0.9 percent.
- In MEA, the capacity is 11.2 million MT, demand is at 8.3 MMT, and CAGR growth is at 1.9 percent.
- In Europe, the capacity is 13.1 million MT, demand is at 11.9 million MT, and CAGR growth at 0.4 percent.
- The largest driver, Asia, stands at a capacity of 52.9 million MT, demand at 44.7 million MT, and a CAGR growth of 3 percent.
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