According to Townsend's Plastic Market Monthly Report, PP Copolymer resin prices increased slightly in April from March levels for most grades. The PMM's volume-weighted average for all PP Copolymer resin grades increased only 0.6 cents-per-pound (cpp) to 97.3 cpp. The largest increases, 1.2 and 1.1 cpp respectively, were felt by buyers of Injection Molding, Low-Med Impact and Injection Molding-Random resin grades.
Suppliers had sought as much as a 5.0 cpp increase for April, but nearly all of that was held off after the rollover in the April propylene contract. Propylene has already settled down 10.0 cpp for May, and this may very well support a drop in propylene resin prices for the month, with some market participants predicting further price erosion for June.
PP Copolymer resin buyers reporting to the PMM are forecasting the volume-weighted average for all grades to decrease by 9.0 cpp in May.
Townsend’s PMM benchmarks monthly transactional resin prices for PS, PVC, PP Copolymer, PP Homopolymer, PET, LLDPE, LDPE, HDPE Molding and HDPE Extrusion in the US and Canada. To participate in the benchmark or obtain subscription information please contact Terry Ulery at +1-281-873-8733 Extention 133 or email tulery@townsendsolutions.com.
Polyethylene terephthalate (PET) and polystyrene, both big players in the packaging industry, may have some competition as more companies look for sustainability options for their packaging needs. Bio-based PLA, PHA, PBT and PEF are beginning to look like more viable option, which could spell trouble for the legacy plastics.
Polylactic acid (PLA), polyhydroxyalkanoate (PHA), polybutylene terephthalate (PBT) and polyethylene furanoate (PEF) are examples of polymers now being developed from bio-renewable resources. PLA is positioned to compete with PET in thermoforming applications, but not in bottle application due to poor barrier properties. However, PEF - with its better heat and barrier properties - has the potential to replace PET. PHA appears to be useful in several other industry segments including agriculture, medical and single-use food service where degradation is valued in packaging.
The largest producers of bio-based polymers include US-based NatureWorks and the Dutch companies PURAC and Avantium. Major brand owners currently using bio-based packaging include, PepsiCo, Coca-Cola, Stoneyfield Farms and France’s Danone. Some industry insiders expect demand for bio-based, biodegradable plastics will more than triple by 2015.
Most HDPE resin buyers reporting to the PMM do not expect their HDPE resin prices to increase in April. This seems supported as it has just been announced that the price increase suppliers sought for April has been pushed and likely won’t be passed on to buyers until May and June. Market sources continue to speculate on the possibility of lower prices over the next few months if the turnaround season ends in May without complications.
The American Chemical Council reported Domestic HDPE resin production increased by a healthy 12.80 percent in February compared to the same month in 2011. Resin sales to Pipe and Conduit extruders increased significantly by 19.52 percent in February compared to the same time last year, with extruders of Non-Corrugated/Gas Distribution pipe showing a dramatic increase of 65.05 percent when compared to February 2011.
Townsend’s PMM benchmarks monthly transactional resin prices for PS, PVC, PP Copolymer, PP Homopolymer, PET, LLDPE, LDPE, HDPE Molding and HDPE Extrusion in the US and Canada. To participate in the benchmark or obtain subscription information please contact Terry Ulery at +1-281-873-8733 Extention 133 or email tulery@townsendsolutions.com.
According to the January edition of Townsend’s Monthly Global EVA Market Intelligence report, US and China have seen positive growth in EVA consumption for 2011. But, since the peak in July there has been a drop in EVA resin purchasing in other regions of the world, specifically Other Asia Pacific and Central South America. There was a marked decline in buying interest among customers in the Other Asia Pacific region as customers reviewed their inventories and projections for year end. China is over capacity on encapsulation sheet grades and Townsend market experts are predicting a depletion of stock. For the most part, prices have declined for all types of EVA in the last half of 2011. Western Europe has seen a recent decline in the photovoltaics segment but with orders in other markets making up the difference, the demand for EVA has been normal.
Earlier this month PlasticMarketData reported on planned capacity announcements in Asia, including an announcement for a 2013 expansion at Tosoh’s EVA production line at the Nanyo, Yamaguchi Japan plant. According to a recent statement by Tosoh “they currently have no announced plan for this expansion and the project is currently on hold." We stand corrected, and apologize for the oversight.
For the latest on global EVA demand, capacity and pricing contact Frances Davidson at +1-281-873-8733 Extension 120 or email fdavidson@townsendsolutions.com.
First in a series of planned Market Intelligence Reports, Townsend’s EVA Global Market Monthly reports on EVA pricing & capacity changes around the world. Covering six key regional and global markets for EVA resin, the monthly intelligence reports cover current market activities, trends & drivers and transactional resin pricing (by %VA content range).
“This report fills a significant gap in EVA market intelligence” states David Anderson, Director of Consulting for Houston based market research firm Townsend Solutions. "Townsend is set to report on monthly pricing, trends and issues affecting growth in EVA markets around the world so our clients can be fully informed by the end of the first week of every month. This real time reporting is key for EVA buyers, petrochemical producers and other suppliers to the global EVA supply chain."
The EVA market was expected to see "robust" growth of upwards of 10% globally in 2011. This has been stalled by a variety of factors including unexpected slowdowns in key growth areas like solar cell applications. Stay informed with monthly updates! For subscription information and a free sample report contact Frances Davidson at +1-281-873-8733 Extension 120 or email fdavidson@townsendsolutions.com.

In the 2002 – 2007 time-frame, HDPE for pipe & conduit applications grew at an average annual growth rate (AAGR) of 8% / year. Then the economic slow-down of 2008 and 2009 took a huge toll on the HDPE pipe market, falling nearly 30% from 2006. Now, if the first half of 2011 demand continues at the current pace, 2011 HDPE demand will approach the peaks seen in the 2006 – 2007 period. Driven by a ever increasing demand for the replacement of decaying utility piping infrastructure and the growing acceptance of HDPE, the market opportunities for HDPE pipe are numerous and sizable.
Of the suppliers of HDPE resin for pipe, Chevron Phillips has the largest market share, followed by INEOS and Dow Chemical.
Over the last 10 years, we have seen the market shares of ExxonMobil, LyondellBasell and resin sold through distribution grow while Chevron Phillips’ share is lower and the remaining producers have mostly maintained their market shares.
On a global basis, Townsend forecasts the pipe market to have the highest growth of all the major processes through 2015. This is driven not only by emerging markets like China, India, Middle East and Central and South America “building new” infrastructure, but by the established markets like North America “replacing antiquated” infrastructure. Townsend’s multi-client report on bi-modal HDPE, an important grade for pipe, is scheduled to publish in October 2011. For more information regarding any of Townsend’s services including the Townsend Polyethylene Report, Townsend’s Plastic Buyers Database, Townsend’s Plastics Market Monthly (resin pricing) or cost modeling contact Frances Davidson at 281 873 8733 Ext. 120 (fdavidson@townsendsolutions.com) or Peter Callais at 281-873-8733 Ext. 150 or via email at (petercallais@townsendsolutions.com).
The Brazilian based company, Braskem, has announced their intended acquisition of Dow’s Polypropylene business. This is a deal that is extremely convenient for both companies according to their future strategies. Based on the recently published 2011 Townsend Polypropylene Report, we forecast the North American and Western European markets to grow at only 2.5% and 2.1%, respectively, per year in the next 5 years, well below the forecasted global PP growth rate of 5.0%/year. However, this acquisition isn’t justified from a market perspective alone.
It’s been some time since Dow signaled that their PP business was not in its future strategy. Low margins, especially in the US, a commodity based product line (non-technology-differentiated) and a necessity of new investments to keep the business growing were some of the reasons for this divestment. As stated by Andrew N. Liveris, Dow's Chairman and Chief Executive Officer recently: “This business has delivered historic margins that do not meet our expectations moving forward and is no longer core to Dow’s strategy. We are shifting our Plastics portfolio from a commodity focus to that of a performance focus. This divestment is directly in line with that strategy, and allows us to continue to focus on our three main priorities: retiring debt, remunerating shareholders and investing in our innovation agenda so that we deliver consistent earnings growth.”
Since 2002, Braskem has had aggressive expansion through acquisitions and strategic alliances, in order to position itself as one of the largest global petrochemical companies. With this acquisition, Braskem becomes the #2 polypropylene producer in North America and gains a foothold in Western Europe, a region that was being served only by a Braskem sales office. Also with this acquisition, the company acquired an amazing platform of innovative PP products such as the INSPIRE™ Performance Polymers. It’s important to mention that the catalyst and technology businesses are not part of this deal and are being kept by Dow. Braskem continued to generate good margins with its operations globally, generating EBITDA in 1Q2011 US$ 570 MM. At this acquisition price (US$ 340 MM, 6.7x PP Dow EBITDA) neither its cash flow nor its “Investment Grade” will be affected. When this purchase is final, Braskem will have a global position in the polypropylene market and will continue to strengthen its position in polyethylene with their new investment in Mexico with Idesa.
Could this be the first sign of a growing trend? As we see more announcements of investments in the US and Canada due to increased availability of shale gas, Townsend believes this will create new mergers and acquisitions opportunities around the world as companies look to better position themselves in the global polyolefins marketplace.
For more information on the polypropylene industry or to
obtain a copy of our newly released 2011 North American and Western European
Polypropylene Market Study reports please contact Roberto Ribeiro at +1-281-873-8733
Extension 155 or email rribeiro@townsendsolutions.com .
Newly published research by Townsend Solutions reports that North America’s HDPE/LLDPE/Swing PE consumption is projected to increase from 12,230 kilotonnes in 2010 to 14,857 kilotonnes in 2015. At the same time, average HDPE/LLDPE/Swing PE capacity for the region is forecast to increase from 15,541 kilotonnes in 2010 to 15,866 kilotonnes in 2015. This means that, in the absence of further capacity announcements, the consumption/capacity ratio for low pressure PE in North America will increase from 78.7% in 2010 to 93.6% in 2015.
The 2011 Townsend Annual Polyethylene Report detailing global consumption, capacity and trade is available now. To obtain a copy of this report please contact Peter Callais at +1-281-873-8733 Extension 150 or email petercallais@townsendsolutions.com.
According to the recently published Townsend Polypropylene Report on Global Consumption, Capacity and Trade, polypropylene (PP) consumption increased 7.3% in the US, Canada and Mexico in 2010, the first year since 2004 that consumption has grown. Although consumption was dramatically reduced in 2008/2009, the strong recovery can be attributed to the stimulus package for autos and appliances and restocking of the supply chain which was de-inventoried during the recession. Mexico’s growth was 13.2%, nearly double its more developed neighbors. Townsend forecasts modest growth in PP consumption at about 2.5% AAGR in the countries comprising NAFTA for the period 2010 to 2015, with the strongest growth in the automotive, sheet and non-woven segments.
For more resin-specific consumption and growth forecast data by world region, process, market or application segment please contact us via email or call +1-281-873-8733.
Propylene monomer prices are expected to reach record high levels in April – rising as much as 20% in one month – and that increase and possibly more is expected to be passed on to Polypropylene buyers very quickly. Supplier nomination letters are coming with a flurry, announcing double-digit increases, mid-month increases and pricing levels that have never been seen before in the Polypropylene market.
Tight propylene supply is to blame after a large number of first quarter 2011 refinery turnarounds. More than 20 US refineries were offline for at least some time during the first three months 2011. High crude oil prices also play into the mix. Not surprisingly, demand for PP has dropped and some processors are looking into material substitutions, but with long approval processes and higher polyolefin cost across the board, many are simply stuck paying the higher prices.
Savvy resin buyers monitor real transactional pricing. Townsend’s Plastic Market Monthly (PMM) is the only pricing publication based on real transactional prices reported directly by resin buyers and covers 11 unique PP resin grades. Each monthly report contains historical pricing data, pricing projections for the upcoming month, monomer and feedstock pricing, current economic data affecting the markets, insight on inventory levels, and news about current supply, demand and market conditions. In exchange for transactional data, qualified PMM subscribers receive preferential pricing on annual subscriptions and access to more than 20 years of historical price data. Email Sue Thackeray to receive the April PP Pricing Reports.
Newly published research by Townsend Solutions reports that global EVA consumption is forecast to grow at an equivalent AAGR of 5.7% through 2014 to almost 4,400 KT, significantly higher than global GDP growth rates. Solar panel encapsulant film and solar battery sheet sealant markets are fueling this high growth. Beginning in March, more than 3000 European Polypropylene processors will have the opportunity to provide extensive feedback to their resin suppliers regarding product and service offerings via the global market research firm, Townsend Solutions.
Townsend is launching its 2011 Europe Polypropylene Customer Satisfaction & Loyalty Survey (CLASS). Sponsored by major polymer suppliers including Borealis, INEOS, LyondellBasell and SABIC, Townsend’s CLASS programs are considered the industry standard for independent, third-party perspective and insight into the needs and expectations of the plastic processing community.
“Representing over 9500 KT of annual polypropylene consumption in 2010, Europe (Western, Central & Eastern), is one of the largest PP markets in the world,” stated David Anderson, Director of Global Consulting – Polyolefin Solutions for Townsend. “The economic challenges of the past two years have dramatically affected several application segments for polyolefins, with European markets being among the worst hit. Customer requirements and expectations are changing, and as a result raw material suppliers are rethinking their service strategies. Participating in this survey is an unparalleled opportunity for PP buyers to provide candid opinions and valued feedback to their raw material suppliers.”
Townsend will explore plastic processors’ changing priorities and their satisfaction with the performance of resin suppliers on more than 15 key issues ranging from product performance to sustainability. For more information on Townsend CLASS programs, or to schedule a convenient appointment to participate in the survey, please contact Ms. Barbara Mitchell, Director of Customer Research for Townsend at +1-281-873-8733 Extension 173 or email bmitchell@townsendsolutions.com .
Based on Townsend’s survey of North American PET resin producers, 16.0 cents of the total 30.0 cents have been implemented from January to November 2010 (see turquoise line). During the same time frame, PET resin buyers have indicated that they have realized a 9.0 cpp increase thus far on resin delivered from January to November (see blue line). Buyers indicated that they expect to realize more of November’s increase with December deliveries.
Braskem may be the first North American polypropylene supplier to announce a December price increase for resin. According to their announcement, Braskem’s polypropylene resins will increase by 3.0 cents per pound, effective December 1. 
Prices, benchmarked in Townsend’s Plastic Market Monthly reports, showed about a 3.0 cpp increase in September, on average with flat to downward pressure in October. For example, the average price for HDPE Large Part Blow Molding Grade Resin was 59.9 cpp in September with a projected October price of 58.8 cpp. LLDPE Octene Liner Resin was 72.6 cpp in September, on average, with flat prices projected for October. 
India’s consumption of LLDPE is projected to grow at 10.9%/year between 2009 and 2014, which is the highest growth rate of all three PE polymers and above the overall 9.6%/year growth rate for PE. Downstream markets report that it will continue to be a major blending partner among LDPE, LLDPE & HDPE resins for film.
Poland-based Anwil has declared force majeure on PVC and caustic soda after a breakdown of electrolysis installation in the chlorine and caustic soda part of the plant complex. The plant produces PVC, VCM and caustic soda.
Global polycarbonate producers include SABIC Innovative Plastics, Bayer, Styron, Policarbonatos do Brasil, Mitsubishi Chemical Corp, Idemitsu Petrochemical, Asahi Kasei Chemicals Corp, Sumitomo Dow Ltd, Teijin Chemicals, Carbolux SpA, and LG Dow Polycarbonate.