The report – IHS Chemical 2014 World Analysis – Polyester – covers historical developments and future projections for supply, demand, capacity and trade in the PET fibre and packaging resin markets from 2008 to 2023. Polyester fibre, the report says, now commands nearly a 50% share of the global natural and synthetic fibre market and is the largest fibre type by volume.
Within the next five years, according to the report, the market for polyester fibre will be larger than all other fibres combined.
“Unlike natural fibres such as cotton, polyester fibres are not subject to weather events, pestilence or poor crop yields that restrict availability and impact costs,” said Ashish Pujari, director, Asia, Fiber and Feedstocks at IHS Chemical. “Polyester fibres have several advantages over alternatives: there is ample availability, an advantaged cost position and favourable performance characteristics relative to competing materials. Combined, these advantages have positioned polyester fibre to achieve the largest gains in the natural and synthetic fibre market.”
According to the report, the polyester fibre market will continue to grow at the expense of other synthetic and natural fibres. Global polyester fibre demand, which was roughly 38 million metric tonnes (MMTs) in 2012, is projected to increase at almost twice the rate of GDP during the forecast period.
Leading the rise in demand, Asia accounts for more than 80% of the world’s growth in polyester fibres. Additionally, more than 90% of polyester fibre capacity resides in Asia, with China accounting for more than 65% of it. Since peaking in the mid-1990s, polyester fibre production in North America and Europe has declined, as textile producers struggle to compete with imports of fibre and low-cost finished goods from Asia, particularly China.
IHS expects that polyester fibre producers in Europe and North America will continue to be under economic pressure as Asia’s dominance increases in fibre and textiles production.
“Further rationalisations and consolidations in these regions are likely, which will help improve margins and operating rates during the next five years,” said Pujari. “However, the polyester fibre business is expected to continue to remain very competitive.”
As polyester textile production in North America and Europe was being lost to Asia, those regions experienced rapidly growing PET packaging markets for beverage bottles and thermoforms. However, the North American PET packaging resin market in particular has seen stagnation of late, largely attributable to an ongoing decline in soda, juice and sweetened beverage consumption as more Americans associate weight gain with sugary, and more recently, low calorie drinks.
Since 1975, PET packaging resins have been used to replace glass bottles for beverage containers, providing a lighter weight, unbreakable alternative to glass. However, in recent years, a host of alternative drinks, including bottled water, teas and sport or energy drinks has meant that fewer plastic bottles are produced. In the case of bottled water, the bottles have been lightweighted and contain only about half as much plastic as the heavier soda containers.
“This continued lightweighting of bottles and packages, driven by economics and the need for an improved environmental footprint, coupled with an increased use of recycled material, have been the main drivers behind the poor demand growth for PET,” said Chase Willett, senior director, Aromatics and Fibers at IHS Chemical. “North America in particular is hurting the global market due to a contraction in carbonated beverage demand that is only partially offset by growth in bottled water markets or organic growth of soda consumption in developing countries. Global PET capacity expansions continue to outpace demand growth by nearly three times. The world now has more than 6 MMTs of excess PET capacity, and we expect this gap to grow to more than 8.5 MMTs in 2014.”
Recycled resins are increasingly competing with virgin PET resins due to good growth in collection. Globally, most of the collected recycle, which likely exceeds 40% of global virgin production, is used in the fibre industry as a low-cost substitute for virgin resin/raw materials in staple fibre, primarily fibrefill applications. There has also been strong growth in the use of recycled PET packaging resin for food and beverage packaging in the west. IHS expects demand for PET packaging resins to peak at more than 20 MMTs in 2014.
“For 2014, there are already more than 1.5 million metric tonnes of capacity expansions announced,” said Willett. “While we expect some capacity rationalisations, they will not make much of a dent in global supply, since the units that may be closed produce only a fraction of the larger units coming online. Four or five older units need to be closed to offset production from just one of the largest new world-scale builds.”
While Asia, he said, dominates the new capacity growth early in the forecast period, IHS expects the Middle East to bring its large, backward-integrated PET packaging resin units on-stream late in the forecast period.
Similarly to production, Northeast Asia (primarily China), also accounts for the largest share of global PTA demand. The shift of textile and, more recently, automotive and other industrial manufacturing to Asia, encouraged the migration of polyester production from the more developed regions such as Europe and North America, to countries like China, India, Thailand, Indonesia, and increasingly, Vietnam.
© FoodBev Media Ltd 2024