Prospect of plastic resin in 2005

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Plastic resin outlook in 2005 (3) connect oil pipes with suitable wrenches

April 25, 2005

Preface: in 2004, global resin suppliers attributed the rise in resin product prices to the high supply prices of benzene. An industrial analyst said at the Canadian plastic resin outlook conference in October 2004 that because benzene is styrene, Plastics such as nylon and polycarbonate, as well as important raw materials for many petrochemical products, make benzene an important factor in the price rise of these products

In 2001, the negative growth of demand and sluggish economy led to the idleness of benzene production units At the same time, the sluggish economy has also delayed the further expansion of the global benzene production capacity Howard Rappaport of chemical market associates said that although the continuous growth of demand in 2003 promoted the production of more benzene to reduce the direct contact between workers and solvents, the increase of benzene in the world was very small In 2004, the contradiction between supply and demand of benzene was further aggravated

the price of benzene is higher than before due to the above reasons In the summer of 2004, the price of benzene almost reached four times of the previous price It is estimated that the global demand for benzene will still exceed the supply in 2005 Therefore, the price of resin products with benzene as the main raw material will remain high in 2005

Mr. David Durand, President and global research consultant of townsend`s polymer services information, said that in 2004, the global consumption of polyolefin products exceeded 100 million tons for the first time Among them, linear low density polyethylene has replaced polypropylene and become the leader in the growth of polyolefin products At present, the growth rate of polypropylene has dropped to 6.5% from 8% announced in the previous five years It is estimated that the annual growth rate of polyolefin products during the year is 7%

Durand predicted that if the tight supply of polyethylene and polypropylene could not be relieved, their prices would continue to rise throughout 2005 As the cost of raw materials and the profits of producers will increase, this phenomenon of high prices may continue until 2006

The high cost of raw materials has significantly reduced the number of resin manufacturers Durand pointed out that in 2004, the unit price of olefins in the United States was the highest in several years, especially ethylene

at present, the regions with large polyolefin consumption in the world are turning to developing countries and regions with high economic growth rate According to Durand's estimate, the growth rate of polyethylene in North America, Europe and Japan will reach about 3%, while that in Latin America, Asia Pacific, the Middle East, Africa and Eastern Europe will reach about 7% In the next five years, the global consumption of polyethylene will increase by 17million tons Polypropylene consumption is similar

in terms of production capacity, Durand pointed out that by 2008, the polypropylene required by the market will increase by 13million tons In order to avoid the utilization rate of its production plant not exceeding 95%, the plant for the production of polypropylene is under intensive construction In addition, HDPE and LLDPE have similar situations

Mr. Howard Rappaport of


chemical market associates believes that the price of benzene, the raw material used to produce styrene, is twice that of the past Now, some data show that the increase of styrene production capacity will be very limited in 2005, which means that this product is still in short supply

although the production capacity of polystyrene is still surplus in the global market, the supply of its upstream products benzene and styrene is tight, which limits the production of polystyrene. At the same time, the high price of benzene also makes the price of polystyrene higher and higher Rappaprot said that the excess production capacity of polystyrene would damage the profits of producers

in terms of demand, China's demand for polystyrene has far exceeded that of other countries and regions Interestingly, in Northeast Asia, about half of polystyrene is used to make electronic products and appliances, and only 20% is used to produce disposable packaging materials However, in the United States and Canada, the situation is just the opposite. Only 9% of polystyrene is used to produce electronic products and appliances, while 58% is used to produce disposable packaging materials


polycarbonate is not only affected by benzene and crude oil, but also limited by the supply of phenol Ben Smith of chemical market associates pointed out that the lack of phenol has limited the production of polycarbonate in some cases According to his estimation, the supply of benzene and propylene will become a problem in 2005, especially in Asia

although the profits of manufacturers are decreasing, more suppliers still participate in the market competition

2004, China has replaced BEIMEI as the main polystyrene consumer, accounting for 25% of the global consumption of polystyrene Smith said that by 2009, Asia will have more polycarbonate than North America and Western Europe combined

polycarbonate has a wide range of applications, among which optical media is the only largest end market According to Smith, the global output of optical media has slowed down after experiencing rapid growth in the late 1990s In, the average growth rate of optical medium production was 23%, which is estimated to be in 2001_ During 2006, its growth rate will drop to 9% At present, polycarbonate consumed by optical media accounts for 21% of the total polycarbonate consumption In addition, sheet/membrane and alloy are the second largest consumer market of polycarbonate, followed by furniture, sports and medicine


the raw materials used to produce nylon are crude oil, natural gas, benzene, cyclohexane and propylene Because of this, the price of nylon has been rising, and may continue to rise in 2005

in addition, there are other factors affecting the nylon Market: the increase in people's demand for carpets and textile fibers has also led to the shortage of nylon supply; The weak dollar makes nylon imported from Eastern Europe unattractive, and the economic growth of Asian countries means that their domestic demand for nylon is very high Leading to a decrease in exports to the United States; As some manufacturers have consumed some waste resins and unqualified materials, the availability of recyclable waste resins is decreasing


since 1999, the price of natural gas has risen by 300% Since natural gas can be used to produce ethylene dioxide, which is the raw material of vinyl chloride monomer (VCM), the price of raw materials for PVC production will continue to rise before the low-temperature experiment On this basis, considering the current utilization rate of PVC suppliers' production capacity of more than 95%, it can be predicted that the price of PVC will remain high in 2005 and the next few years

at present, the large demand for PVC in China and the United States is also one of the main reasons for the decline of PVC prices According to Terrence Hurley, President of Shawnee chemical, in North America, about 50% of PVC is used in the construction industry. Especially since 2003, the growth rate of PVC usage is 50% faster than that of GPD Therefore, Hurley believes that in the foreseeable future, PVC manufacturers will continue to maintain the price strength of their products

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