2011 Mid-Year Review of North American HDPE Pipe Market: Strong Demand Continues

From new drainage systems for golf courses to the rebuilding of North America’s infrastructure, PE pipe & conduit is experiencing resurgence in growth similar to what was seen in pre-economic crisis times.  In the 2011 Townsend Polyethylene Report, we reported a nearly 21% jump from 2009 – 2010 in PE consumption for the pipe & conduit market for all PE resin types.  About 90% of the market uses HDPE in pipe & conduit applications.  While many other PE markets have retracted somewhat from the remarkable 2010 rebound, during the first half of 2011, HDPE for pipe & conduit is showing continued high growth of over 16% compared to first half of 2010.   The highest growth is in the non-corrugated applications including potable water, gas distribution, industrial/sewage, and conduit.


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.
 

According to the Townsend Plastic Buyers Database, there are about 225 PE pipe manufacturing sites in all of North America.  The major producers of HDPE pipe have changed considerably in the last 10 years due to mergers, acquisitions and divestitures.  Of note:  Advanced Drainage Systems purchased Hancor making it the largest HDPE pipe producer, the Rinker Group divested the plastic pipe and liner operations creating “Polypipe”, Arnco and Dura-Line merged to create A-D Technologies, and USPoly Company, J-M Manufacturing and PW Eagle combined to form JM Eagle.  The Top 5 producers ADS / Hancor, Performance Pipe, JM Eagle, PolyPipe Inc., and A-D Technologies account for 55% of the HDPE pipe market.


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).

Posted by Plastic Market Data at 16 Aug 2011
Categories: Resin Producer Capacity and Supply, Polyethylene
Tags: HDPE Pipe Molding
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