1 November 2006 – China is likely to remain a major net importer of polypropylene, despite investment plans for over 6 million tonnes of new capacity over the next four years, according to AMI Consulting.
A number of analysts have forecast China’s PP imports to fall as the new capacity comes on, but UK-based AMI has issued a report which suggests its imports may rise to 5 million tonnes in 2010 from just over 3 million tonnes in 2005.
The consultancy bases its expectation on a detailed review using a large number of interviews with processors questioning demand by market sub-segments. Exports of products manufactured in PP have been a massive driver of demand in recent years, but now domestic demand will accelerate on the back of fast growing consumer expenditure and demographic shifts, AMI believes.
Exports of products using PP accounted for about 25% of the total Chinese market in 2005. But government policy has sought to encourage domestic consumption and reduce the economy’s reliance on exports, suggesting local demand will become a more significant force in the PP market in the period to 2010.
In 2005, 68% of PP was used in China for extrusion applications and 32% for injection moulding. The fastest growth rates have generally been achieved by injection moulding sectors, such as packaging, automotive and appliance applications.
