World Terephthalates and Polyester Analysis

Population growth and increasing per capita consumption by a growing middle class in the emerging markets primarily drives fiber demand growth, as per CMAI. Among both natural and synthetic fibers, polyester fiber, due to its ample availability, advantaged cost position and versatile performance characteristics relative to competing materials, is capturing the largest share of demand growth for fibers. PET packaging resin growth rates, however, have outpaced polyester fiber growth over the past five years, and by now PET packaging resins account for over 30% of total global polyester production. PET packaging resins historically have grown at nearly two times GDP, but that rate has begun to slow as substitution for glass packaging and other materials has been by and large accomplished. The global economic downturn in 2008 and 2009 heavily impacted the terephthalates markets and demand for all polyesters fell from 2007 to 2009. Demand for the two polyester feedstocks PTA and DMT also declined as a result. However, DMT suffered an even larger reduction in demand due to the continuing decrease in DMT-based polyester production as producers switch to PTA, as well as a sharp fall in polybutylene terephthalate (PBT) demand. PBT is primarily used in automotive, electronics and other durable applications that were particularly hard hit by the recession. As the global economy recovers and continues to grow, textile requirements will grow as well. Polyester fibers are the most economic and versatile fibers in the marketplace today, meeting the demands of a wide variety of applications. Currently, no other single natural or synthetic fiber better meets those needs than polyester. There is no new synthetic or natural fiber on the horizon that threatens to replace polyester. Except in specialized niche applications requiring more stringent performance characteristics, polyester fibers will continue to offer the best value proposition. In the plastic packaging arena, PET packaging resins are forecast to remain the number one choice for clear, light-weight beverage packages with very limited competition from other plastic resins. PET is typically a clear winner over glass and also competes well with aluminum. Viable recycling outlets, including bottle to bottle recycling, are creating another barrier to entry for other resins.
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