Global Market Outlook on Polypropylene

  • The global market is estimated to grow at a CAGR of 5.0 percent during 2017-2022 
  • Rise in disposable income and increasing demand from the CPG, and automobile industry are likely to drive the growth in the emerging markets such as Brazil and Asia
  • Demand from "Highly Market" ,such as North America and Europe, is likely to slow down in the coming years.


Demand Market Outlook

  • The global PP market has surplus capacity from MEA, NA and demand is expected to increase sharply from the Asian countries 
  • China is moving towards the stage of self-sufficiency, while supply deficit will increase across LATAM and Europe

Industry Best Practice

Engagement models

  • Direct buying and consortium buying are the two relevant engagement models in the industry 
  • Direct buying is mostly preferred by the CPG industry (large volume, >5,000 MT/year) and consortium buying is preferred amongst small capacity (<500 MT/year) buyers

Contract structures

Fixed Contract 

  • Length of contract: 6 months-1 year 
  • Volumes in contract : >1000 MT/year

Multi Year Contract 

  • Length of contract: 2-3 years (to establish long term relationship in a highly matured market) 
  • Volume in contract : >5000 MT/year

Global Market Size –Polypropylene

  • The global PP market is expected to reach $115 billion by 2022
  •  Key driving end-use industries are CPG segment (food/non-food containers, caps-closures, films etc.) and auto components (internal structures, bumpers, dashboard carriers, door panels)
  • Market size in Asia is expected to witness a high growth rate of  6-7percent (CAGR), while markets like the US and Europe are expected to witness a growth of 3-4 and 2-3 percent CAGR during 2017-2022

Global Capacity-Demand Analysis

  • Improving feedstock propylene supply in the Chinese market (using cheaply available propane/coal as a feedstock) along with capacity additions will result in lower prices of PP and intensify the global competition

Market Outlook 

  • No capacity additions in the US, Europe, and LATAM have kept pressure over domestic supply availability
  • Europe and LATAM are expected to operate at the maximum rate of 90– 95 percent in the forecasted period
  • The global demand is expected to witness a growth of around 5.0 percent until 2022, driven by Asia
  • Asia represents almost 58 percent of the global consumption of polypropylene with China being the major consumer