PET producers in China to increase exports in 2012 on increased domestic competition

06-Jan-12

Some large new PET capacity additions are scheduled to come on-line in China in 2012, adding over 1.5 mln tons of new PET capacity. This will heat up competition within the domestic market. As a result, PET producers plan to increase their export sales in 2012, as per ChemOrbis, amid concerns among some sellers that the market may become saturated if producers do not ramp up their export activities. A trader offering Chinese PET for export commented that PET demand inside China was healthy last year and they expect to see another year of solid demand growth. "PET demand increased by around 12% in China last year and we expect further growth in 2012. We are feeling optimistic about our prospects for the first half of this year but we are concerned about the second half of the year as the addition of several large new capacities in China will bring increased pressure to the export market as the domestic market is not large enough to absorb all the new capacity that will be coming on-stream," the trader commented. "We expect to see a greater export volume from China later this year as we do not believe that domestic demand will be able to absorb all the new capacities set to come on-line in the coming year," added another trader. "We believe that we will be able to achieve greater sales volumes and that we will be able to get more attractive prices from our suppliers later this year as we think that Chinese producers will be more anxious to conclude export deals once these new capacities come on-line," the trader commented. "There are several large capacity additions coming on-line later this year and we fear that the domestic market may become oversupplied given the sluggish global economic outlook," reported a source at a Chinese producer. "We will be observing the market trends closely this year so that we can adapt to changing circumstances," the source added. A source at another Chinese producer added, "We are facing tougher competition in the local market as more than 1 million tons of new capacity is set to come on-line in the first half of this year.