China Continues Domination of Global Polyester Markets – With Varying Outcomes

As in recent years, events and investment in China continue to dominate. But individual sectors are following different paths and enjoying (or otherwise) mixed fortunes.

Polyester Filament
During the past five years, the annual rate of growth in the global production of polyester filament has been 8.6%, well above the all fibre average of 4.9% per annum.  In 2015, the global growth rate slowed to 4.8% with China slowing to 6.5%.

In 2016, production growth of polyester filament in China is expected to have slowed further to 6.1% due to weakness in Chinese and global economies. Worldwide polyester filament production grew 4.9%. However, polyester filament demand is expected to improve (5.7%) in the remainder of the forecast period due to continuing trends to filament processing.

Growth rates in polyester filament production are not forecast to be universally high, however. For example, it is expected that the world polyester filament market will continue to be dominated by mainland China, where production has grown at an average rate of 10.0% per annum during the past five years. However in the US, production of polyester BCF has increased because not only is the carpet market more resistant to import penetration than other sectors, but polyester BCF is replacing both polyester staple and nylon as well as polypropylene and nylon BCF. But in most regions outside Asia, output of filament has been slowing.

Polyester Staple
The global situation with regard to polyester staple is similar to that of filament, with China dominating and squeezing output in the western regions of the Americas and West Europe, as well as the local Northeast Asia region. However, output in the Middle East & Africa and South & Southeast Asia is forecast to continue growing.

The global growth in production of polyester staple during the past five years has been a more modest than for filament, being 2.9% per annum, below the all fibre average of 4.9% per annum. However, a slightly higher rate of growth closer to the all fibre average, is forecast through to 2025, the result mainly of a shortage of cotton and manmade cellulosic fibres. It should be noted that demand for polyester staple is expected to remain strong not only in the textile sector but also in the fast expanding nonwoven market.

PET Packaging Resin
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)

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. 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 further small and medium sized plants will be shut permanently in the near term.

Tecnon OrbiChem’s latest analysis of global polyester fibre, resin and film markets (The Polyester S/Db-CHEM ) takes a comprehensive and in-depth looks at capacity, production, consumption and trade of polyester fibre and PET packaging resin in the period to 2025.

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roger_v2
Roger Lee
Managing Director
Phone: +44 207 924 3955
roger.lee@orbichem.com

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