Global demand is expected to remain essentially flat, growing from 16 Mt in 1999 to 17 Mt in 2005. Chem Systems projects that pricing for all PEs will decline over the next 3 quarters even though producers are proposing price increases at the moment. Increased North American supply from the Union Carbide and NOVA Chemicals plants in Alberta will add to the oversupply. With all this new supply, it is expected that prices will remain depressed until after 2003. A wildcard in any PE projections is China.
China also buys erratically.
Demand can be very strong and then stop overnight, drop to zero for an extended period, and then shoot up again overnight. These spikes play havoc with PE supply and demand and pricing. Global demand is expected to grow from 29 Mt in 1999 to 43 Mt in 2005. The situation is worst in North America because US capacity additions are occurring the most rapidly. There is new North American PP coming on-stream in 2000 and 2001, but no new announcements for startups after 2001 have been made.