The breadth and depth of the 2009 slowdown in automotive production and sales have resulted in demand destruction for petrochemicals, including many plastics, according to a new report, which found that polypropylene (PP) demand alone could freefall from just less than 700 million lb last year to 323 million lb. The special report from Platts entitled “Latest Carmaking Forecast Cuts Deeper into Commodities” found that demand for PP, which represents the largest volume of resin used per light vehicle, has plummeted since its 2006 peak of 1.23 billion lb. Assuming no changes in the immediate term, Platts believes peak-to-trough demand destruction would be 44%—the same as for carbon steel.
On the basis of a JD Power & Assoc. estimate, the report posited that North American automotive production would be off by 37% in 2009, putting 1.1 billion lb of plastics, ranging from PP and polyurethane to nylon and polycarbonate, at risk.
Looking at the five main resins by weight found in the typical light vehicle, Platts calculated that in addition to PP losing nearly 280 million lb in demand from the auto sector in 2009, polyurethane could fall by more than 203 million lb for the year, with total consumption of about 540 million lb in 2009. Nylon demand for light-vehicle production could fall by 138 million lb, with acrylonitrile butadiene styrene (ABS) and polyvinyl chloride (PVC) looking to lose 86 million and 83 million lb, respectively.
The report was created in April, and since then, the market has experienced additional shocks, including the bankruptcies of Chrysler and General Motors. In the presence of such turmoil, JD Power & Assoc. Automotive Forecasting, which was used as a basis for the report, downwardly revised its forecast of North American light-vehicle production to 8.6 million units for 2009. — [email protected]
Resin lb/vehicle, MY2006
Polyvinyl chloride: 24
Thermoplastic polyester: 21
Polyethylene ether: 13
Unsaturated polyester: 13
Polyvinyl butyral: 7
Other resins: 5
Source: American Chemistry Council