HOUSTON, Oct. 30 /PRNewswire/ -- Unusually high global crude oil prices, and volatile natural gas prices in North America continue to put upward pressure on production costs for resin producers, Chemical Market Associates, Inc. (CMAI) reports in the recently completed 2007 World Polyolefins Analysis. This market study provides clients with historical perspective and insight into the forecast of supply and demand dynamics, capacity, trade patterns, pricing relationships, profitability, production costs and technology for global polyolefin markets (PE & PP) for the period 2001 to 2011. Additionally, clients will find CMAI's new online Supply/Demand database a necessary tool for their strategic business decisions. Some key issues examined in the analysis are:

Energy fluctuations are impacting regional cast costs.

Since crude oil and natural gas derivatives are the primary feedstock used to produce ethylene and propylene, the monomer raw materials used in polyethylene and polypropylene production, energy plays a key role in the cash cost dynamics of polyolefins. Access to low-cost feedstock will be an advantage in the cost of manufacturing PE and PP. For now and the balance of the forecast period, the Middle East will command a considerable cost advantage in the production of ethylene and polyethylene and a limited advantage for propylene and polypropylene. Overall softening of global economic strength and increasing prospects for an energy-driven slowdown in developed regions could combine to negatively influence polyolefins demand.

Polyolefins continue to compete with traditional materials; paper metal, glass and wood.

Global demand of thermoplastics is dominated by demand for polyolefins (PE & PP), representing well over 60% of all commodity resins consumed on an annual basis. Polyethylene (PE), including LDPE, LLDPE and HDPE, is the largest cumulative category at 38 percent share, while polypropylene (PP) is the largest single category at 24 percent. CMAI experts anticipate that throughout the forecast period, growth in total demand for polyolefins is expected to moderate from historical levels in developed economies, while still maintaining an overall growth rate above GDP. LDPE being the most mature product area is expected to grow at rate well below GDP due to minimal capacity expansions scheduled for the near future.

China remains a preferred site for manufacturing of plastics fabricated goods.

Trade patterns are changing for PE/PP resins and plastic finished goods: China is the largest volume importer of polyolefins, focusing on shipping out large amounts of fabricated goods. On the contrary, the Middle East will persist in proliferating new polyolefin capacity and will be exporting more resins to Asia, West Europe and ultimately the Americas. As finished goods continue to flow out from China, destined for the U.S., Europe and Japan, the fabricators in the receiving regions will be under competitive pressure from these lower cost, competitive items. Other developing economies, including those of India, Viet Nam, the Middle East, Central European countries and Russia will participate in the finished good trade over the next five to ten years.

CMAI's 2007 World Polyolefins Analysis is available in book and CD-ROM format and also includes technology analysis, trade, price forecasts as well as other pertinent issues relating to the polyolefin industry. Online Capacity and Supply/Demand databases create a full spectrum of knowledge pertinent to these markets.

CMAI is a petrochemical consulting firm that services a wide range of companies all over the world. Since 1979, CMAI's goal has been to provide accurate, timely consulting services for the worldwide petrochemical, plastics, fiber and chlor-alkali industries. CMAI maintains offices in Houston, New York, London, Dubai, Dusseldorf, Singapore and Shanghai. Clients to CMAI services include chemical and oil companies, engineering and construction companies, banking and financial institutions, plastic converters, government agencies and trading companies.

For more information on CMAI's 2007 World Polyolefins Analysis visit CMAI's website at http://www.cmaiglobal.com/ or contact:

Anne Thomasson
CMAI
11757 Katy Freeway, Suite 700
Houston, TX 77079 U.S.A.
Tel: 281-531-4660 Fax: 281-531-9966
Email: athomasson@cmaiglobal.com
Chemical Market Associates, Inc.

CONTACT: Anne Thomasson of Chemical Market Associates, Inc., 1-281-531-4660, or fax, 1-281-531-9966, or athomasson@cmaiglobal.com

Web site: http://www.cmaiglobal.com/

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Published: 2006/10/30 12:00:37 CST

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