Polypropylene prices may fall

The prices that packaging manufacturers pay for polypropylene may fall as resin producers' aggressive expansions over the next three years are expected to outpace demand.

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So says the 600-page 1997 Polypropylene Annual Report from Phillip Townsend Associates Inc. (Houston, TX). Global utilization rates of resin plants will decline from a 90% peak in 1996 to as low as 84% by 1999, says the report. "The prices of polypropylene compared to other commodity resins are looking very favorable" for packagers, according to Andrew Stevens, an analyst with PTAI. "Where people can switch, they are thinking about switching to polypropylene." Overcapacity is expected to affect the prices of all types of PP packaging, from closures to containers to film, according to Stevens. Lower prices "should continue probably through the rest of the century," Stevens adds. "We just see a lot of polypropylene capacity coming onstream and producers have got to push those pounds somewhere." PTAI says packaging accounts for about a quarter of the PP market.

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