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Polypropylene: The Leader Board is Changing

Excess Capacity Will Hurt Profitability

11:50 AM MDT | September 12, 2008 | Natasha Alperowicz

The expected downturn in the global petrochemical industry will have a major impact on the polypropylene (PP) sector, analysts say. Huge capacity additions under way coupled with high feedstock costs will reduce operating rates and hurt the industry’s profitability. Almost 3 million m.t./year of effective new PP capacity is being added this year alone, says Bob Dennett, senior consultant at CMAI (Houston). “This represents an increase of roughly 6% over the capacity in 2007,” Dennett says. An estimated 20 million m.t./year of additional capacity...

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