ICIS is this year forecasting that China’s PP capacity will be at 118% of demand versus 70% in 2000 and 91% in 2014 – the year of that pivotal decision.

Let’s put this into context: The $232/tonne spread up until 3 March 2023 compares with the 2003-2021 average annual spread of $546/tonne (we need to discount the 2022 spread of $244/tonne because last year was when the downturn began).

As I said, it is natural to want to believe that things are getting better, even if the fundamentals point in the opposite direction.

The 2014 vision was to become a net exporter in some products, and, as I shall discuss shortly, this could happen in PP by as soon this year.

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The southeast Asian premium reached a record monthly high in March 2022 of $222/tonne, when container freight was still very expensive.

It was stated that using higher powder loading for LPIM feedstock is usually not desirable, as it could generate process-related issues and complications such as agglomeration, inhomogeneity in the feedstock and different defects in each step. Additionally, the absence of elements in the binder that assist shape retention at high temperatures indicates the precise debinding and sintering should be performed with extra care. It can also be challenging to attain excellent mechanical characteristics with the lower powder loading in LPIM feedstock compared to HPIM feedstock.

LPIM has been used successfully for ceramic component production in low and high volumes for several decades, whilst HPIM has, for the past thirty-to-forty years, focused largely on the high-volume production of a wide range of materials including alloys, hard metals, and ceramics for relatively small, highly complex shaped components. However, LPIM is attracting the attention of HPIM producers and component users because of the potential savings through using lower-cost and reduced-size injection moulding equipment, the development of feedstock binders with improved flowability using low-molecular-weight polymers, and the elimination of multiple debinding steps which are required in HPIM.Recent research has shown that LPIM can also be a cost-effective process for prototyping and small-series production of complex, near-net shape metal-based components with high added value, such as for aerospace and medical applications. However, the primary challenge for adopting LPIM is the composition of the feedstock, which affects issues associated with injection moulding and subsequent debinding.

Consider, however, this next chart. It shows annual southeast Asian PP injection grade price spreads over CFR Japan naphtha costs.

The good news for the polymers business is that the collapse of container freight rates means that shifting volumes around the world has become much more affordable. The polymers world – as I said would happen – has re-globalised.

Section 4 outlines the LPIM moulding process, which is said to be very different from HPIM, in three subsections; injection machine and mould, parameters and defects, and simulation.

The above chart compares monthly CFR SE Asia PP injection grade prices versus CFR China PP injection grade prices since both the ICIS price quotes began in November 2002 . The extreme right-hand side of the chart shows an increase in the southeast Asian price premium over China since January 2023.

Long Son Petrochemicals is expected to start up new capacity in Vietnam in the second quarter this year. We, as a result, expect Vietnam’s PP net imports to fall from 620,000 tonnes in 2022 to 420,000 tonnes in 2023.

These are the most volatile and difficult market conditions I’ve seen in my 26 years of analysing this industry. Friends and contacts, some of whom have worked in the industry for more than 30 years, tell me these are the worst conditions they have seen.

For reasons I’ve discussed before on the blog, I believe that China will see a tepid economic recovery in 2023 following the end of the zero-COVID restrictions.

LPIM is described in this survey as a promising technology that is already in use for commercial products, with the lower cost of LPIM equipment making it a cost-effective process, whether for low- or high-volume production. A further benefit of LPIM is the ability to carry out injection moulding at lower temperatures than HPIM, which is favourable for some specific powders such as magnetic alloys vulnerable to oxidation at temperatures above 200°C.

Last year, China’s net imports fell to 3.2m tonnes from 3.4m tonnes in 2021. And in 2020, China’s imports were 6.1m tonnes.

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The review is divided into six sections. Following the Introduction, Section 2 outlines the features of the ideal raw material, for both metal and ceramic, such as powder Particle Size Distribution (PSD) and its effects on surface area, rheology and packing density, all of which influence the flowability of the LPIM feedstock and the homogeneous filling of the mould cavities. This section also covers binders used for LPIM feedstock, which are composed of multiple ingredients to account for the numerous tasks the binder must accomplish. The binder must make the powder flow, prevent powder agglomeration, prevent phase separation, and decompose gradually during debinding, and should not chemically react with the powder.

I see 3% growth this year as the most likely outcome. This would be higher than last year’s 1% growth, but nothing like the virtual economic boom that’s been talked-up in financial markets.

The long-delayed Pengerang Refining and Petrochemical complex may become fully operational in 2023. This could see Malaysia’s net exports rising to around 560,000 tonnes from an estimated 160,000 tonnes in 2022.

In order to ascertain the future potential of LPIM, a group of researchers at the Montanuniversitaet Leoben, Austria, (V Momeni, M Hufnagl, Z Shahroodi, S Schuschnigg, C Kukla and C Holzer), and the Luxembourg Institute of Science and Technology (J Gonzalez-Gutierrez), has produced a comprehensive survey of published research on the characteristics of all processing steps in LPIM, including the characteristics of metal and ceramic powders used, binders, moulding, debinding and sintering. The 44-page survey, including 226 references from both academic and industrial research work, was published online in Materials, 16, 379, December 23, 2022.

Another successful development is a partially water-soluble binder system used for the LPIM of alumina powder. The binder system consists of Poly (2-ethyl-2-oxaline) as the water-soluble portion, LDPE for high strength during debinding, SA, and a small amount of gelling agent to decrease its viscosity. LDPE is a thermoplastic polymer used as the backbone in feedstock preparation for micro-PIM and LPIM. Iron parts have also been reported to be produced by LPIM using four irregular shaped particles sieved at < 45, <20, and <10 µm (56–58 vol.% powder loading) as well as a spherical iron powder with a d50 as low as 4 µm (62 vol.% loading) using a standard wax-based binder system.

With regard to feedstock, it was stated that the low-viscosity, multicomponent binders typically used in LPIM have largely been based on paraffin wax (PW) which ensures excellent moulding capabilities and promotes powder-binder interactions and feedstock stability, resulting in little segregation. Such low-viscosity wax-based binder systems are said to exclude polymers because of their high molecular weight.

This appears to be partly because of human nature. People don’t like to believe in the worst or most realistic outcomes, so in the past we have seen – and we are seeing today – brief surges in positive sentiment that boosts apparent demand.

I should also add that it won’t be just stronger sentiment that drives brief recoveries. There will be pockets of genuinely stronger demand in certain PP end-use applications – and perhaps across all applications in certain regions. No downturn is ever entirely linear.

But then the premium fell as freight rates declined, which allowed producers to more easily move oversupply in China to other regions.

These are just some of the challenges which have been reported on by different researchers on the LPIM process in the literature. The authors stated that this first comprehensive literature review of the many investigated metallic and ceramic materials processed by LPIM will help provide a basis for any future work required to overcome challenges.

The authors of the review reported that research groups have used LPIM to produce parts from a range of metal alloys including iron, 316L stainless steel, Inconel 718 superalloy, and ceramics and cemented carbides, in the range of 100–10,000 units. Current research efforts were found to be focused on developing experimental methods and numerical simulations to examine the impact of powder characteristics, injection parameters, and feedstock properties/features on metal powder and binder segregation during LPIM.

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In 2021, China was responsible for 42% of global net PP imports among the countries and regions that imported more than they exported.

China’s PP injection grade spread over naphtha costs are the lowest so far this year since the first full year of the ICIS price assessment in 2003.

We have reached a tipping point where only quite minor changes in operating rates and demand growth will make a big difference to China’s net imports or net exports in 2023, as the chart below illustrates.

The risk for liquids-based cracker operators is that if they don’t show extreme geographic sales flexibility, while accurately predicting inter-regional market peaks and declines, they will suffer heavy raw-material inventory losses.

And the good news for PP is that there are many other important import markets aside from China, as today’s final chart tells us.

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But human nature is hardly going to change. This means we will see many more temporary inter-regional market spikes as we head towards the bottom. but Please don’t lose sight of what the connected ICIS data is saying.

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Section 3 introduces techniques for characterising feedstocks; including rheology, thermal analysis, and several methods for determining the homogeneity of feedstocks used in LPIM.

The spread so far this year of $368/tonne is the lowest annual spread since 2002 . Spreads do not lie. They remain one of the single best measures of supply and demand balances.

In the final section, the authors outline their views on the further development and application of LPIM and present intriguing suggestions for future investigations with the potential to increase new opportunities for the LPIM process. They also propose the future use of LPIM feedstock in Material Extrusion (MEX)-based Additive Manufacturing processes such as ‘direct ink writing’ and ‘robocasting,’ since the feedstocks behave similarly to those used in LPIM.

By the end of last year, premiums were back to around their longer-term average. But they rose in January and February 2023, and for the week ending March 2023, premiums stood at $143/tonne.

Section 6 describes the sintering process. The sintering step in LPIM is essentially very similar to HPIM – both are highly dependent on the metal or ceramic powder used in the feedstock. The low pressure used in LPIM can affect the sinterability of moulded and debound components and the use of sintering additives is sometimes required.

Section 5 discusses debinding, which is essential due to the use of wax binders. Thermal wick debinding has been found to be highly successful for LPIM.

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Here’s the thing: Until the China spread recovers to around $546/tonne there will have been no recovery. Period. That’s how this industry works.

An example was a week of slightly stronger pricing in China after this year’s Lunar New Year holidays. This was on what I see as the mistaken belief that there would be a big economic recovery following the end of the zero-COVID restrictions.

The chart below – which I’ve used before because it is critical – represents the downcycle (the left-hand side of the V-shaped trend) and the upcycle which, of course, is the right-hand side the V.

A good example are events the southeast (SE) Asian polypropylene (PP) market -the subject of the rest of this post. A quick glance at the next two charts might give reason for cheer.

The next chart might also give the impression that the southeast Asian market is seeing the beginnings of a sustainable recovery. The chart shows southeast Asian PP injection grade price premiums and discounts over China’s injection grade – again since our assessments began.

How will we know, as the weeks move along, if I am right? It is again the spreads, this time of course in China. that will tell us the real situation.

I CANNOT emphasise enough the importance of petrochemical companies increasing their production and sales flexibilities as we head towards the bottom of what seems likely to be the deepest and most prolonged downcycle our industry has seen.

In addition to focusing on the importance of suitable powder selection, numerous researchers have proposed several binder compositions that can be used with various metal and ceramic powders in the LPIM process. Ultimately, the proper combination of binder and powder in the LPIM feedstocks ensures good quality parts obtained by LPIM. As already mentioned, wax-based binders are generally used in LPIM, but the past fifteen years have seen an increasing focus on the use of low-molecular-weight polymers to produce low-viscosity feedstock.

A razor-like focus on fluctuating netbacks and supply and demand among all the different countries and regions will allow producers to ensure that they don’t make product for markets where there is no demand, while ensuring that they take maximum advantage of many brief periods of stronger demand and pricing.

Low-pressure Powder Injection Moulding (LPIM) and High-pressure Powder Injection Moulding (HPIM) are essentially similar manufacturing processes. However, the LPIM process requires the use of low-viscosity feedstocks between 1.5 and 4.0 Pa·sec to take advantage of lower injection pressures of less than 1 MPa. HPIM injection pressures typically range between 20 and 200 MPa, using, for example, a moulding machine with a complex hydraulic unit, pistons, and spindles to process feedstocks with viscosities ranging between 100 and 1000 Pa·sec.

LPIM moulding machines, in contrast, tend to use simple hydraulic mechanisms and are generally smaller in size, resulting in lower equipment costs, lower energy consumption, lower mould wear, less feedstock contamination from spindle or piston wear, minimal mixture adhesion to the mould, and non-separation of the feedstock binder from metallic powder.

Now onto China the next chart, which shows what I’ve been warning about since 2014. China has added a great deal of PP capacity following Beijing’s “national interest” decision in that year to move to much greater petrochemicals self-sufficiency.

The above chart shows my latest forecasts for China’s PP demand. Note that I’ve provided four scenarios, rather than the usual three, because of exceptional uncertainty.

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