European polypropylene market shows muscle - C&EN Global

Nov 6, 2010 - After some disappointing early years, polypropylene is beginning to show muscle in West European plastic markets. Consumption of the pla...
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European polypropylene market shows muscle After some disappointing early years, producers are now busy planning expansions After some disappointing early years, polypropylene is beginning to show muscle in West European plastic markets. Consumption of the plastic has been increasing 30 to 50% annually over the past few years. Today, it is well over 100,000 metric tons. In fact, at present, consumption is growing faster per capita in the U.K. and Italy than in the U.S. And of western Europe's dozen producers, all except one are either expanding or are planning to expand capacity for polypropylene in the near future. Several key factors lie behind this brightening picture for the plastic. Polypropylene's earlier technical problems, particularly dyeability, have been largely overcome. New and larger-volume applications—beer crates, for example—have come on the scene. And with increasing capacity, the price trend has been downward. The future outlook is still brighter. As Ziegler-Montecatini licensees, polypropylene producers have been confronted with certain export and fiber production stipulations. However, some of the fundamental West European patents on polypropylene will expire in the early 1970's. This would diminish the value of these licensing agreements and probably facilitate export of polypropylene to some additional countries as well as production of polypropylene fiber. Biggest markets. The U.K. and Italy boast the biggest markets for polypropylene. In 1967, consumption of the plastic in the U.K. was about 40,000 metric tons. The two producers, Imperial Chemical Industries and Shell, look for demand this year to climb 357c to about 54,000 metric tons. ICI estimates 1970 demand will be about 95,000 metric tons. Injection and blow molding are the leading applications, accounting for 517c of U.K. consumption in 1967. The most important uses were crates for beer and soft drinks—about 34,000 metric tons; housewares—more than 2000 metric tons; auto parts—about 2800 metric tons. Fibers, including film yarns and tape, accounted for 28.5% in 1967. Demand for this application, says ICI, should treble by 1970 and double again by 1975. Main outlets are ropes, twines, fish nets, woven sacks, carpet 36 C&EN MAY 13, 1968

backing, and carpet pile. The fastest growing areas for polypropylene are crates, auto parts, tote boxes, film yarn and tape, waste pipe, and fittings. Moving to keep pace with the growing demand, Shell boosted its capacity for polypropylene from 16,000 metric tons to its present 45,000 metric tons last year. Shell's Carrington plant can be used to produce either polypropylene or high-density polyethylene. ICI meanwhile is expanding its capacity for the plastic to more than 60,000 metric tons by year's end. U.K. exports of the plastic in 1967 amounted to about 20% of production, which was 49,000 metric tons. About

the same percentage will likely be exported this year. Shell points out that its exports of polypropylene are negligible, adding that in fact it imports certain grades from Shell plants in the Netherlands and the U.S. Devaluation has improved the prices obtainable in sterling although it hasn't affected the quantity exported. This is because of limitations on capacity, ICI says. The U.K. price is currently 24 to 25 cents a pound. In Italy, birthplace of polypropylene, consumption in 1967 was between 30,000 and 40,000 metric tons. Forecast for 1968 is an increase of 15 to 20%.

All but one European producer plans to expand capacity 1

Company

Plant location

1 1 1 1 1

Austria Petrochemie Schwechat France Naphtachimie

1 1 1 1

Société Normande de Matières Plastiques Lillebonne Italy Montecatini Edison Ferrara and Terni

1 1 1 1 1

Netherlands Rotterdamse Polyolefinen Spain Paular

Capacity (Metric tons per year)

Remarks (Capacities in metric tons per year)

1 1 1

Schwechat, near Vienna

12,000

Expansion to 20,000 planned

1

Lavera

60,000 (including high-density polyethylene)

Capacity of 60,000 by end of 1968

10,000

Expansion planned

1

100,000 plus

Capacity of 100,000 plus by end 1968

1

Pernis (Rotterdam)

15,000

Studying plans for expanding

1 1

Puertollano

12,000

Expansion to 28,000 planned

1

Capacity of 61,000 by end of 1968 No expansion plans at present

1 1 1

Capacity of 21,000 under construetion

1 1 1

Capacity of 300,000 by 1970

1

U.K.

1

ICI

Wilton, Yorkshire

56,000

1

Shell Chemical

Carrington, near Manchester

46,000

1 1 1

West Germany Badische Anilin-& Soda-Fabrik

Ludwigshafen

1

Farbwerke Hoechst

Frankfurt/Main Hoechst

1 1

Scholven-Chemie /Chemische Werke Huls

GelsenkirchenBuer

3,000 (modified polypropylene) 155,000 (including high-density polyethylene) 8,000

Capacity of 20,000 by end of year

1

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Injection molded parts, pipe, sheet, film, and the like account for about 64% of Italy's current consumption. The remainder is fiber and monofilament. In order of emphasis, film is getting the most attention, followed by fibers, monofilaments, and fibrillated products. Film and fiber use had been developing slowly, primarily because of technical problems, according to Montecatini Edison. But now most of these problems have been solved. MonteEd, currently busy expanding its capacity for the plastic to more than 100,000 metric tons annually, exports 20 to 30% of its production. This percentage is not likely to change much over the next two to three years, the company says. The current price in Italy is about 25 cents a pound and is edging downward. Tougher time. Polypropylene has had a tougher time of it in the other EEC countries. In West Germany, for instance, 1967 consumption was 25,000 metric tons; in France, only 10,000 metric tons. There are several reasons for this. For one thing, high-density polyethylene has been getting more attention and has some of the applications which have become accepted as polypropylene's in other countries. This is particularly true in West Germany where patent and licensing arrangements make it more desirable to promote high-density polyethylene. For another thing, the price of polypropylene in West Germany and France (about 32 to 33 cents a pound) is particularly high. Furthermore, there is a greater price differential— about 5 cents a pound in West Germany, even bigger in France—between polypropylene and high-density polyethylene than in most other countries. However, prices of both plastics are edging downward and the price gap between the two is narrowing. The outlook is good, if not revolutionary. In West Germany, consumption this year should rise 28% to about 32,000 metric tons; in 1970, it could reach 45,000 metric tons. French producer Société Normande de Matières Plastiques (SNMP) predicts consumption in France will jump 40% in 1968 to 14,000 metric tons and will hit 25,000 metric tons by 1970. Also, there is a lot of expansion under way. Hoechst will nearly double its capacity for high-density polyethylene and polypropylene to 300,000 metric tons by 1970 (the firm doesn't break out its polypropylene capacity). Huels, Scholven-Chemie, and BASF are all adding substantial capacity. BASF offers what it calls a modified polypropylene, stressing that its product is not a polypropylene "in the sense of the international terminology." Introduced in fall 1966, the polypro-

Some polypropylene patents will expire by mid-1970fs Company

Date basic patent expires

Austria Petrochemie Schwechat Belgium Rotterdamse Polyolefinen France Naphtachimie Société Normande de Matières Plastiques Luxemburg Rotterdamse Polyolefinen Netherlands v Rotterdamse Polyolefinen Spain Paular Sweden *Esso Chemical U.K. Shell Chemical ICI

1977 Late 1975 Late 1975 Late 1975 Late 1975 1983 1976 Late 1972 Late 1971 Late 1971

*No present plans to build a plant.

pylene is tradenamed Novolen and is produced by a BASF process in a 3000-metric-ton pilot unit at Ludwigshafen. Now under construction at the Wesseling site of Rheinische Olefinwerke, a 50-50 joint venture of BASF and Deutsche Shell, A.G., is a 21,000-metric-ton plant. According to BASF, Novolen is suitable for many of the same applications as conventional polypropylene. Current price is about 14 cents a pound. In France, which has two producers, Naphtachimie, S.A., will have a capacity of 60,000 metric tons for high-density polyethylene and polypropylene by the end of this year. SNMP also plans to expand its 10,000· metric-ton plant but by how much and when hasn't been decided yet. The application pattern is much the same as that for the U.K. and Italy, with injection molding dominant. SNMP adds that packaging applications have lagged in Europe, primarily because of strong resistance from cellophane, jute, and sisal producers. Benelux. The only Benelux producer is Rotterdamse Polyolefinen Maatschappij, N.V., jointly owned by Shell (60%) and Montecatini Edison (40%). It's plant at Pernis (Rotterdam) has a current capacity of 15,000 metric tons annually. But plans for a significant capacity increase are under detailed study, RPM says. According to RPM the most important current uses for polypropylene are in injection molding, particularly beer crates, and in split film. All of its output is marketed exclusively through

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Shell. The current Benelux price is about 25 cents per pound. Most of the output of Paular, S.A., Spain's only producer of the plastic, goes to the small Spanish market. Last year consumption amounted to about 4000 metric tons, Paular says. This year it is expected to be 6000 metric tons; in 1970, 9000 metric tons. Paular plans to increase its capacity from 12,000 to 28,000 metric t o n s but it doesn't say when. Price on the Spanish market is about 28 cents a pound and the major applications are injection molding; filament for rope, bags, carpet pile, and fibers. In Austria, Petrochemie Schwechat, A.G., a subsidiary of Ôsterreichische Stickstoffwerke, A.G., has a 12,000metric-ton plant at Schwechat, near Vienna. Most of this output is exported, according to a company spokesman, as the domestic market is still rather small. However, there are plans to expand the plant to at least 20,000 metric tons in the not-too-distant future.

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The French government is worried about the future of scientific and technological research in France. In a meeting to prepare the sixth state plan (Le Vie Plan) for 1970-75, a committee representing education, industry, and research under the direction of Prime Minister George Pompidou took a close look at future expansion of scientific research. A number of developments are creating much anxiety about the future of research. In February, French research scientists took strike action to publicize their fear about future prospects. Most of the fundamental research in France takes place in state laboratories (that is in the universities and in nationalized industries). There are now fewer jobs in research than there are qualified applicants. Industry is also cutting its research spending and buying more know-how. The main decisions of the meeting were to increase developmental rather than fundamental research, and to persuade private industry to support a part of the national research program. Currently, fundamental and applied research gets 50% of national R&D funds. By 1970, it's likely that the share will have dropped to 40%, although the total R&D outlays will grow. In 1970, the French government will be spending 2.5% of gross national product on R&D, with a 1980 target of 3.5% of GNP.