Polypropylene Market: In-depth analysis of Trends, Challenges and Future opportunities

Polypropylene, a polymer of propylene by addition polymerization reaction, is a thermoplastic synthetic resin with excellent properties. It is a colorless semi-transparent thermoplastic lightweight general purpose plastic.

Polypropylene production technology mainly includes solution method, slurry method, bulk method, gas phase method and bulk - gas phase combination process. At present, the more advanced production processes in the world are mainly gas phase process and bulk gas phase combination process.

Industrial production of polypropylene in China began in the 1970s. After more than 30 years of development, it has basically formed a production pattern of batch bulk method, bulk method, bulk gas-phase method, gas phase method and other production processes at the same time, and large, small and medium-sized production scales coexist. With the rise of new process routes such as coal (methanol) to olefin and PDH, it has laid a solid foundation for the development of polyolefin raw material routes in China in the direction of diversification, and has formed a pattern of multiple raw material routes simultaneously and competing with each other.

World polypropylene supply and demand analysis and forecast

World polypropylene production capacity continues to grow. In 2023, the world's polypropylene production capacity will reach 108.207 million tons/year, an increase of 5.8%. In 2023, the output was 84.156 million tons, an increase of 1.0%. The average operating rate of the plant was 77.8%, down 4.0 percentage points year-on-year.

Northeast Asia accounts for the largest proportion of polypropylene production capacity in the world. The world's polypropylene production is mainly concentrated in Northeast Asia, North America and the Middle East. In 2023, the polypropylene production capacity in Northeast Asia will reach 53.74 million tons/year, accounting for 49.7% of the world's total production capacity, ranking first; North America's production capacity is 10.57 million tons/year, accounting for 9.8% of the world's total capacity; The Middle East region has a capacity of 10.064 million tons/year, accounting for 9.3% of the world's total capacity.

In 2023, the number of major polypropylene production enterprises in the world exceeds 200, and the top ten production enterprises have a total capacity of 42.464 million tons/year, accounting for 39.2% of the total production capacity. Among them, Sinopec is the world's largest production enterprise, its capacity of 100.03 million tons/year accounts for 9.3% of the world's total production capacity. Lyondellbasell and Saudi Aramco are in second and third place respectively with capacity of 6.706 million tons and 5.539 million tons per year.

With the production of new and expanded installations in Northeast Asia, Southeast Asia, India, Pakistan and North America, it is expected that the world's polypropylene production capacity will reach 118 million tons/year in 2025, and the annual growth rate of annual production capacity from 2021 to 2025 will be 5.2%. In the next few years, Northeast Asia is still the world's main polypropylene consumption area, and the average annual growth rate of demand is higher than the world average; As new plants come on stream, the shortfall in polypropylene will be greatly reduced and may even turn into a net export area in some periods.

Current situation and forecast of polypropylene supply and demand in China

Supply analysis

China's polypropylene production capacity is growing rapidly. By the end of 2023, China's polypropylene production capacity reached 39.54 million tons/year, an increase of 16.2%; The output in 2023 will be 32.255 million tons, an increase of 7.0%. The annual average operating rate is about 81.6%.

By the end of 2023, there are about 92 polypropylene production enterprises in China, with a total production capacity of 39.54 million tons/year.

In recent years, in addition to petroleum and petrochemical enterprises, the share of private enterprises in the market has gradually increased, and the industry concentration is low. In 2023, Sinopec's polypropylene production capacity will account for 25.4% of the total production capacity; Petrochina accounts for 11.5% of total capacity; Other enterprises accounted for 63.1% of the total capacity.

Import and export analysis

China is a net importer of polypropylene, polypropylene imports in 2023 to 2.697 million tons, a decrease of 235,000 tons, a decrease of 8.0%; Imports amounted to $2.79 billion, a decrease of $770 million, or 21.6%. In 2023, the export volume of polypropylene was 1.149 million tons, a decrease of 0.8 million tons, a decrease of 0.7%; Exports amounted to $1.39 billion, a decrease of $360 million, or 20.4%.

In 2023, the general trade ranked first in China's polypropylene import trade, with a trade volume of 1.802 million tons, accounting for 66.8% of the total import; The second is the import processing trade, the trade volume of 473,000 tons, accounting for 17.6% of the total import. Polypropylene imports mainly from South Korea, the United Arab Emirates and Japan and other countries or regions. Among them, 531,000 tons came from South Korea, accounting for 19.7% of the total import; 407,000 tons came from the United Arab Emirates, accounting for 15.1% of the total imports; 257,000 tons came from Japan, accounting for 9.5 percent of total imports. The imports of the above three countries or regions accounted for 44.3% of China's total polypropylene imports.

Consumption analysis

In 2023, the apparent consumption of polypropylene in China was 33.798 million tons, an increase of 5.9%. The self-sufficiency rate was 95.4%, an increase of 1.0 percentage points year-on-year. Polypropylene in China is widely used in all aspects of life, from the daily use of plastic wrap to the bumper on the car. Among them, drawing continues to occupy the first place, followed by injection molding, fiber, BOPP, pipe and other fields.

Forecast of supply and demand

China's polypropylene production capacity is still in the rapid growth stage, the contradiction between supply and demand will intensify. According to incomplete statistics, China plans to add 24 sets of polypropylene plants before 2025, with a new capacity of 12.8 million tons/year. The raw material sources are mainly oil and propane, and the market pattern will be redistributed. It is expected that by 2025, China's polypropylene production capacity will reach 52.34 million tons/year.

China's polypropylene demand growth is still mainly driven by domestic demand. As the main downstream products of polypropylene, the change in production capacity will directly affect the change in polypropylene demand, because the technical threshold of plastic knitting is relatively low, corporate profits are relatively weak, resulting in relatively slow development of the industry. BOPP and CPP due to the rapid growth of downstream delivery packaging and medical demand, will stimulate the rapid development of demand in the industry. It is expected that by 2025, the apparent consumption of polypropylene in China will reach 43.05 million tons.