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Polyethylene-HD
HDPE
resins are characterized by relatively short and aligned side chains. The
short branches permit molecular packing to a greater extent and the
resulting polymer is highly crystalline (80-90%) and dense. Linear
polyethylenes with densities over 0.940 are classified as high-density
resins. Last
August Dow Chemical Company announced it would idle approximately 885
million pounds of polyethylene capacity in North America. Dow said the
idling was "demand-driven" and reflected concern about energy and
gas costs. Affected sites and the product mix have not been disclosed. In
North America Dow has 9.8 billion pounds of annual polyethylene capacity
comprised of LDPE, 1.8 billion pounds; LLDPE, 6.1 billion pounds and HDPE
(high density polyethylene), 1.9 billion pounds. BP
and Solvay merged their operations in high-density polyethylene into
separate joint ventures in Europe and the US in 2001. The new entity, BP
Solvey Polyethylene, includes Solvay’s polyethylene plant in Deer Park,
Tex. Chevron
Phillips/BP Solvey is a 50:50 joint venture that commenced production in
2002 with a new 700 million-pound plant at Cedar Bayou, Tex. Subsequently,
BP Solvey Polyethylene eliminated 260 million pounds of HDPE capacity at its
Deer Park, Tex. plant. The resultant capacity at the site is 1,740 million
pounds. Basell
was created in 2000 by the merger of Montell and Targor, the respective
polypropylene businesses of Shell and BASF; and Elenac, the companies' 50-50
polyethylene joint venture. In 2002 Basell idled its 485 million-pound
polyethylene facility in Lake Charles, La. Basell is reported to be
considering converting this unit to polypropylene production. In
February 2002, Formosa Plastics began operating a new 550-million-pound HDPE
unit at Point Comfort, Tex. Later the same year, ExxonMobil has permanently
shut down a 60 million-pound HDPE line at its complex in Baton Rouge, La. In
mid-2001, Formosa Plastics brought on-line 880 million pounds of new LLD/HDPE
capacity at its Point Comfort, Tex., plant. Voridian
is a division of Eastman Chemical Company. Profile
last published 3/19/01; this revision, 12/8/03. DEMAND 2001:
12,320 million pounds; 2002: 13,600 million pounds; 2006: 16,220 million
pounds, projected. Demand equals production plus imports (2001: 2,509
million pounds; 2002: 2,524 million pounds) less exports (2001: 1,930
million pounds; 2002: 2,148 million pounds). GROWTH Historical
(1997 - 2002): 3.0 percent per year; future: 4.5 percent per year through
2006. PRICE Historical
(1997 - 2002): High, $0.545 per pound, g.p. blow-molding, bulk, frt. alld.;
low, $0.315, same basis. Current: $0.51 to $0.54, same basis. USES Blow molding, 40 percent; injection molding, 20 percent; film, 20 percent; pipe and conduit, 13 percent; sheet, 6 percent; wire and cable, 1 percent. STRENGTH HDPE’s largest segment, production of blow-molded containers, has enjoyed steady and better than GDP growth since the early 1970s. The market segment is expected to continue to grow at slightly better than 5 percent per year, to 6.6 billion pounds by 2006. About two thirds of the HDPE blow-molding resin consumption goes into food bottles for liquid products and bottles for household chemicals. The balance is consumed in diverse container applications. The second-largest application for HDPE is injection molding. Market growth is expected to average 5 percent per year over the next four years, from 2.7 billion pounds in 2002 to 3.3 billion pounds by 2006. WEAKNESS Rising
domestic feedstock costs and restructuring outside North America are
narrowing the US competitive advantage over its global competitors. The
leading LLDPE exporting regions are now the Middle East, Canada and
Malaysia. OUTLOOK Polyethylene
is balanced being somewhat constrained by ethylene availability due to
recent turnarounds and the rationalization of ethylene capacity, nearly 10
percent of the installed base, since 2000. Polyethylene producers have
achieved significant price increases earlier this year to mitigate the
margin squeeze imposed by higher ethylene costs, which were driven by
significantly higher natural gas prices. Industry participants are looking
to 2004/2005 for a rebound in polyethylene and other petrochemicals. New gas
wells presently being drilled should help to lower and stabilize natural gas
prices, and the demand side pulled along with a more robust economy.
Polyethylene overall should grow at nearly 5 percent annually, and HDPE is
forecast to do slightly less at 4.5 percent growth, primarily driven by its
major applications: blow-mold containers and injection molded products. HISTORICAL
DATA
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