West Asian And The Middle East Commodity Market

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Status of polypropylene production in the Middle East - By 2016, out of 4

Mahshahr region with a production of 670 thousand tons, has been superrior from two regions of Assaluyeh and other regions with a total production of 435 thousand tons

Out of 4.7 million tons of poly-alefin (including polyethylene and polypropylene) produced in the Middle East

Countries such as Saudi Arabia, Qatar, the United Arab Emirates, and Oman have made significant investments in Petrochemical infrastructure and have become key players in the global petrochemical industry, including Polypropylene production. The Middle east benefits from abundant and low-cost feedstock, primarily natural gas and crude oil, which are essential for the production of polypropylene. These countries have established large-scale petrochemical complexes and integrated refining and petrochemical facilities, leveraging their feedstock availability to produce a wide range of petrochemical products, including polypropylene.

The global polypropylene capacity is expected to see significant growth, potentially increasing from 97.65 million tonnes per annum (mtpa) in 2022 to 159.35mtpa in 2027. This represents an expansion of 63%. A total of 159 planned and announced polypropylene projects are expected to come online, predominantly in Asia, followed by the Middle East. Producers in Asia and the Middle East are encouraged to adopt a more global approach due to regional market dynamics. This is because markets have become more regional, with oversupply and weak demand in Northeast Asia (NEA) and Southeast Asia (SEA), logistics challenges, and tight supply with resilient demand in the West.

These points highlight the dynamic nature of the polypropylene market in West asia and the strategic moves by producers in the region to navigate the global supply-demand landscape. There is an expected supply glut in China, which may affect the global market, including the Middle East. Middle Eastern refinery-based polypropylene plants are unlikely to reduce production, aiming to increase market share despite the oversupply. European polypropylene faces competition from imports, including those from the Middle East, due to increased availability of lower-cost material. In the US, polypropylene supply is expected to outpace demand, but propylene may see support from new polypropylene plants.

The United arab emirates is home to several petrochemical companies with polypropylene production capabilities. Companies such as Borouge (a joint venture between Abu Dhabi National Oil Company and Borealis) and Abu Dhabi Polymers Company (Takreer) have significant polypropylene production capacities in the country. Oman also has a presence in the polypropylene market through companies like Oman Oil Refineries and Petroleum Industries Company (Orpic), which operates a polypropylene production plant in Sohar.

By 2016, out of 4.7 million tons of poly-alefin (including polyethylene and polypropylene) produced in the Middle East, 23.4% is polypropylene. Mahshahr region with a production of 670 thousand tons, has been superrior from two regions of Assaluyeh and other regions with a total production of 435 thousand tons. Of the three Certification in this area, two are owned by Basell, one by BP and the other by A.B.B. One complex based in Assaluyeh is licensed under Basell and two complexes in other areas are licensed under Himont. The country's poly-alefin production capacity will reach about 10 million tons per year in the coming years. 

Meanwhile, the increase in polypropylene was only 750,000 tons, which is also related to other regions. This means that Mahshahr and Assaluyeh will not have a share in the development of polypropylene. The share of this polymer in the total future capacity of poly-alephins produced in the country will decrease by 4.5% to 18.9%. Therefore, for the most up-to-date and accurate information on the current status of polypropylene production in West Asia (Middle East), it is recommended to refer to industry reports, market analyses, and updates from relevant sources and organizations.

Within Asia, China is leading with the largest capacity additions of 22.35mtpa from 51 planned and announced projects. The Middle East follows with a capacity of 8.62mtpa from 22 new-build planned and announced projects. The Asian polypropylene production expansion is set to meet unclear demand, with a total of 5.95 million mt/year new capacities expected to be brought online from the end of 2020 to the first half of 2021, including significant contributions from China. The Middle East is projected to be the second-highest region in terms of polypropylene capacity addition in the global polypropylene industry, growing at an average annual growth rate (AAGR) of 9.5% from 9.22 mtpa in 2018 to 14.80 mtpa in 2023.

Saudi Arabia is one of the leading producers of polypropylene in the Middle East. Companies like Saudi Basic Industries Corporation (SABIC) and Advanced Petrochemical Company have significant polypropylene production capacities in the country. SABIC, in particular, operates multiple polypropylene plants across Saudi Arabia. Qatar is another important player in polypropylene production. Qatar Petrochemical Company (QAPCO) and Qatar Chemical Company (Q-Chem) are key producers of polypropylene in the country. These companies have established joint ventures with international partners to expand their production capacities and cater to global markets.

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