After the Calm … A Surge of New PET Resin Capacity Additions in 2017

After a quiet period for new capacity during 2015 and 2016, new capacity expansions, mainly focused on China, are coming in 2017. However, it is likely some of the 2017 start-up dates (shown in the following table) may be delayed, depending on market condition.

World New PET Resin Plants 2016-2017
(1,000 Metric Tons)

Start-Up

Company

Location

Capacity

 Start-up

China Resources Packaging Material

Zhuhai, China

 Oct 2016

Jiangsu Sanfangxiang

Jiangyin, China

 Q1 2017

Zhejiang Wankai New Material

Haining, China

 Q1 2017

Hainan Yisheng Petrochemical

Yangpu EDZ, China

 Q2 2017

M&G Group

Corpus Christi, US

 Q3 2017

Hosaf Fibres

Jacobs, South Africa

 Q3 2017

Jiangyin Chengsheng (Chengao)

Jiangyin, China

 2017

Sichuan Shengda Chemical

Nanchong, China

 2017

Total

4,212

Existing overcapacity has also led to industry restructuring and plant closures over the past year or two. Several small and medium-sized PET resin plants in China have closed permanently during the period. Japan Unipet’s plant at Iwakuni was closed in early 2015 and Egypt’s EIPET has idled one line and not started the second at its plant in Ain Sokhna. In addition, SK Chemical in South Korea plans to cease standard bottle grade PET resin production (80 ktpa) by the end of 2016.

Looking to 2017, renewed capacity expansions have many market participants taking a skeptical view for 2017 PET business, particularly in China, due to overcapacity in a market with slowing growth and limited export opportunities. Most see it as inevitable that some small and medium sized plants will be shut permanently in the near term.

Acquisitions were a major feature of the past 18 months with Indorama buying facilities in Spain (Cepsa), Turkey (Polypex) and India (Micro Polypet). Restructuring also occurred via joint-ventures including the Indorama-Dhunseri JV in India combining Indorama’s Polyplex facility with Dhunseri’s plant at Haldia, India providing the JV with a total resin capacity of 700 ktpa.

Backward integration was also evident with Indorama acquiring the PTA facilities of Cepsa (Canada and Spain) and BP (Decatur, Alabama, US).

According to Tecnon OrbiChem data contained in the most recent update of the PET Packaging Resin S/Db-Chem World Analysis , global consumption growth in 2016 is expected to be 4.6% due to market maturity, global economic slowing and decelerating Chinese domestic growth. Regional consumption growth is expected to vary widely in 2016 with rates ranging from 1.8% for Northeast Asia to 11.3% in South & Southeast Asia.

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Darrel Collier_web


Darrel Collier
Business Manager
– Synthetic Fibres, Polyester & Intermediates Phone: +44 207 924 3955
darrel.collier@orbichem.com

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