Polypropylene Producers Plan New Capacity for International and Domestic Markets

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Researched by Industrialinfo.com (Industrial Information Resources, Incorporated; Houston, Texas). ConocoPhillips (NYSE: COP) (Bartlesville, Arkansas) commissioned one of its two new polypropylene (PP) reaction trains in March of this year at their Linden, New Jersey refinery site after many delays due to poor market performance. Basell (Hoofddorp, Netherlands) plans to restart idled PP capacity in Texas next year plus convert an existing polyethylene production unit in Louisiana to produce approximately 225,000 metric tons per year of PP by 2005. The startup of the ConocoPhillips unit combined with Basell's plans, signals long-term confidence in the domestic market that has been plagued with multiple plant shutdowns and closures over the past three years.

In international markets, where feedstock and energy cost are significantly less than here domestically, there are plans for a large amount of new capacity anticipated to kick-off over the next two years. Since the beginning of 2002, Industrialinfo.com has reported 26 individual PP projects that were proposed to kick-off in the years 2003 and 2004 totaling over $3 billion in capital spending. New capacity in Asian and European regions is limiting export opportunities for many domestic producers.

Click the image to the right to view an index of International PP projects reported by Industrialinfo.com.

Polypropylene production, like many polymers, is closely tied to consumer spending and the domestic production of plastic goods. With war campaigns becoming a secondary topic in news headlines globally, consumer confidence will likely rise and aid the economy in experiencing a strong second half to the year. Reduced feedstock and energy cost combined with several recent and proposed price increases should also aid in achieving higher returns for domestic producers. Currently, there is a stable outlook for the price of natural gas, propylene and ethylene in the coming months and into next year, further enhancing the industries ability to profit.

For complete project information on these 26 projects contact

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