PET overcapacity helps reduce sourcing costs of processors, penetrating markets of other materials

08-Oct-09
Overcapacity is plaguing the PET supply side, but is also enabling processors to source the material for less and use it to continue penetrating markets more accustomed to polystyrene, PVC, polypropylene, or other materials, as reported in Plastics Today. That in short is the industry’s current situation, according to Horst Maack, founder of Maack Business Services, which in December will hold its 14th annual Polyester & PET Chain Congress. A major focus of the event will be the excessive worldwide polyester capacity of about 58 million tons (60% for fiber, 40% for packaging resin), split between more than 400 suppliers—more than are involved in any other thermoplastic. Consumption for all applications is around 48 million tons. This indicates the massive problems this industry is facing and explains why several global and local companies are closing individual plants or totally ceasing production. It has not, however, hindered other global players in the chain adding further production plants especially in the Middle East. As per SRI Consulting, worldwide PET polymer capacity is forecast to grow 1.8% pa to 2013. Although expansions have been announced worldwide, the Middle East, Central and Eastern Europe, and Africa are the only regions expected to show a significant increase in overall market share. Western Europe is the only region whose capacity will actually decrease during 2008–2013 on an average annual basis. Demand for PET polymer derivatives will increasingly be met by imported material from the Middle East. Not only has consumption of PET polymer for solid-state resins slowed in the developed regions, but there also are limited future capacity investments in these regions compared with the Middle East, Asia (mostly China), and Africa. These latter regions will produce more polyester fibers and PET solid-state resins, not only for consumption, but also for export. According to Maack, PET’s pricing has for some years tracked that of major thermoplastics. Even so, several attempts by suppliers of polypropylene (52 mln tons of global capacity) to replace PET in key applications such as carbonated drink bottles have had little success to date. On the contrary, due to the unique properties of polyester resins, they have replaced PP, styrenics, and other major thermoplastics in some applications.
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