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Braskem PP purchase will not solve US market woes

July 29/2011

(ICIS) -- Braskem's purchase of Dow Chemical's global polypropylene (PP) business could bring more discipline to the US market, but it will not solve the fundamental problem of feedstock shortness, market sources said on Thursday.

The purchase, announced on Wednesday, includes two PP plants in the US and two in Germany, with a total capacity of more than 1m tonnes/year.

By acquiring the two Texas plants, one in Freeport and one in Seadrift, Brazil-based Braskem will increase its PP capacity in the US by 50% to 1.4m tonnes/year, making the company the leading PP producer in North America, the company said.

But there are still nine other PP producers operating in the market, sources said, adding that it will be difficult for one company to exert much influence. It also does not change the most significant factor in the market, which is the short supply of feedstock propylene, sources said.

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