Further expansion of world polyester production capacity

　

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Since the fourth quarter of 2013, the global polyester PET market supply has continuously increased, resulting in more fierce market competition in this industry. In order to control the rapid emergence of a serious oversupply of polyester PET, it is expected that the global polyester PET equipment will be installed in 2014. The load rate will be maintained at 60 to 70%. At present, many polyester PET producers in Asia stated that the Asian polyester PET industry in 2014 will be the same as in 2013, and may continue to maintain weak profits or even losses. In particular, the polyester project is still expanding and starting production. The continuous increase in the number of polyester products circulating around the world also threatens the production profits of the industry.

From a global perspective, a number of projects will be put into production one after another in 2014. Egyptian PET producer EIPET has announced that its new 225,000-ton/year production line in the Ain Sukhna region has officially put into operation. The first of two 216,000-ton/year PET production lines in KoKsan, Turkey, also started operation in early November last year. The minimum load rate for 2014 was planned to be 90% of the production capacity. The construction of a new 200,000-ton/year polyester PET plant in the Teeside area of ​​the British Lotte Company is also accelerating and is expected to be completed in the first quarter of 2014. Two new polyester PET production lines with a capacity of 230,000 tons/year in the Pernambuco region of Brazil's PetroquimicaSuape will also enter commercial production at the end of January 2014. Saudi Basic Industries Corporation (SABIC) will also start its new 420,000-ton/year PET plant in Yanbu at the beginning of this year. The plant was originally scheduled to be put into operation in the fourth quarter of last year, but was forced to postpone it due to project schedule problems. At present, the global polyester PET market has already been oversupplied, but local producers are willing to continue to expand production capacity, which will eventually lead to weak demand in the polyester PET market, high inventories, falling prices and weakening profitability. According to rumors, a Korean manufacturer said that based on the current global polyester PET market supply situation, Asian PET manufacturers will continue to struggle in 2014. Like 2013, 2014 will not be better. A South Korean manufacturer said that South Korea is the largest source of imports of polyester PET in Europe. The production of a large number of new PET resin capabilities in Europe and the Middle East is bound to pose a threat to Korean producers. In addition, some South Korean manufacturers are also concerned about the abolition of import duties on Indian-origin goods in Europe from January 2014, as this will directly compete with South Korean sources.
 

China has become the world's largest producer of bottle-grade polyester PET chips, and its production capacity is expected to reach 9 million tons or more in 2014. The oversupply situation will continue in 2014, or will cause the price of polyester PET to fall. According to market news, China Yisheng Hainan Petrochemical Company put into use a newly built 500,000-ton/year PET production line in September 2013, and another 500,000-ton/year PET production line is also planned to start up in the near future. However, due to the lack of business, market participants expressed doubts about the sustainability of the company's new installations to generate revenue. However, there is also a Chinese manufacturer that said that the improvement of the macroeconomic situation may boost the consumer confidence of downstream users.
 

It is predicted that the economy of the United States and Japan will improve in 2014, which will help increase buying interest in downstream industries. According to market analysis, the growth rate of PET resin demand in 2014 may be less than 5%, and the global bottle-grade PET chip production capacity will increase by more than 15%. In 2014, the global bottle-grade PET chip production capacity will increase to approximately 29 million tons, while the demand is estimated to be only 20 million tons. It is worth mentioning that after the Spring Festival in 2014, the polyester PET market in markets around the world is still undergoing constant changes. For example, the spot market in Asia is sparsely traded, and there will be a certain replenishment demand in the downstream, and sellers refuse to significantly lower their quotations. In particular, many factories of fiber-grade polyester chips have not fully resumed production, and the market for fiber-grade chips is limited. The polyester bottle chip market usually enters the peak season from March to cope with exports to Europe and other places. Therefore, sellers are also cautious. OK. The price of bottle-grade chips in Asia is relatively chaotic. For example, individual manufacturers in South Korea generally quoted at US$1,320/ton, but then fell to US$1,300/ton FOB Korea. However, the bidding price generally appeared below 1,300 US dollars/ton, and the large intentional spread between the buyer and the seller made the transaction difficult to achieve. Spot prices in the Southeast Asian market have declined, which has restricted market discussions this week. Manufacturers offer about FOB around US$1,400/ton, but end users and traders insist on refusing to trade at this price.
 

It is reported that the market price in India is also showing weakness. It is said that some recent transactions to the Middle East/Africa have been realized at US$1,350/ton FOB India, but the specific news has not been confirmed. The Chinese mainland market price has recently seen a decline of US$10/ton. For example, spot transactions in Taiwan have generally been completed within the estimated range. In addition, the film-level slice market in Asia is also more complicated. For example, the quotations of Southeast Asian film-level slices are concentrated at US$1370-1380/ton FOB East Asia, but no firm transaction has been seen; the quotation in the Korean market appears at US$1330/ton FOB East Asia. Downstream demand continues to be weak, and oversupply is still a major problem in the fundamentals of the Southeast Asian market. Looking back on February 12, the price of polyester PET market in Asia fell to US$1,290/ton (FOB Northeast Asia) and US$1,325/ton (FOB Southeast Asia), which was only slightly higher than the low price of US$1,285/ton (FOB) at the end of January. Northeast Asia) and US$1320/ton (FOB Southeast Asia), which are lower than any other time since July 2012. In addition, the polyester PET market in Europe is very complicated, and real transactions are now scarce. I heard that the price of bottle-grade PET in Russia has remained stable. Because the previous intention to increase the price was resisted by buyers and ultimately failed to materialize, SIBUR maintained its quotation at 65,000 rubles/ton. (Russian domestic prices include 18% value-added tax. There are also some Gulf Cooperation Council (GCC) regional traders in the Middle East market that expect demand to improve in March 2014 as the summer peak season approaches. However, traders also Said that unless the price of raw materials fluctuates significantly, the spot price of polyester PET is very likely to remain stable, and this is mainly caused by the oversupply in the Asian and Middle East markets. Looking back on February 12, the spot price of polyester PET in Europe was 1110-1115 Euro/ton (1518-1524 USD/ton, FD Northwest Europe), which is the lowest price since September 2010.
 

Industry insiders believe that due to the price cuts of raw materials and import pressure, prices will fall further. The pressure is due to the low prices in Asia and the high exchange rate of EUR/USD. It is estimated that new devices in non-EU regions in Europe will also cater to European demand. EIPET is a joint venture company, India Dhlenseri Petrochemical and Tea Company accounted for 70% of the shares, Egypt Petrochemical Holding Company (ECHEM) and Egyptian Petroleum and Processing Engineering Company accounted for 23% and 7% of the shares respectively. EIPET has a 420,000-ton/year facility in Sokhna, Egypt. The joint venture plans to serve users in North Africa, North America and Europe. The commissioning of the plant was postponed several times, especially in view of the political situation in Egypt. But the company's people said at the end of last year that the device will be put into production at the end of December (2013) or January (2014). This set of equipment has two production lines, each with a production line of 210,000 tons/year. The company also said that one set of equipment has been put into operation in January, but it is not clear when the second set of equipment will be put into operation.