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Russian PP market to start growing in 2011

July 27/2009
MOSCOW (MRC) -- PP consumption is to start growing not earlier than 2011, MRC’s analysts stated in the Annual Market Report. Their conclusions are based on analysis of converters’ operations; for the time being the majority of them have suspended investments into output expansion.
The market becomes more mature because of the crisis. It has already passed through the phase of rapid growth that had lasted right till the middle of 2008. Over that period, PP demand was on average increasing 15.2% annually. Meanwhile, the market is seeking out for the “bottom”, and the ambit of the downfall in 2009 is not clear yet. The market will demonstrate zero growth rates in 2010, analysts say.

Recovery will start in 2011 being accompanied by increasing PP demand on average by 70 kt annually.

Only two sectors will remain in a good state: production of films (BOPP, ), as well as of thermoformed containers and disposable tableware. The sector of molded goods (mainly automobile components) and large-size home appliances, particularly laundry washers, will be demonstrating the highest growth rates during the post-crisis period.

In 2008,  PP consumption increased 7%, and moved at 620 kt. Only two sectors were the most dynamic: production of fibers and filaments (+26%), and extrusion of films (+23%).

In spite of the imminent crisis, leaders in  PP processing kept on investing even in Q4 2004. In 2008, they imported 250  PP processing units with overall output capacity 173 kta.

Source: MRC

For more details on trends in the Russian PP market, see Polypropylene in Russia 2009.

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