Introduction
Global capacity of PET market was approx 42.9 million ton inyear 2006, which is expected to grow by 5 percent every year till year 2011. Inthis year PET polymer capacity was increased with 2.9 percent. In developingnations and in developed nation consumption growth is expected in double digitstill year 2011.
* Estimated
In 2008 PET production Capacity
Overview of Polyester fiber and filament industry in 2008
In 2007, total global polyester consumption was estimated at44,000,000 tons with an annual growth rate of 7%. This comprised 25,500,000 tons of fiber, 16,000,000 tons of bottles/containers and 2,500,000 tons offilm/sheet. Earlier in 2008 cost of all the polyester derivatives increasedwith growth in demand but selling price of polyester fiber face failure in price increase. In first half it was noticed that even due to fear of recession output andeconomic performance affected markets across the world compare to last year.
In the second quarter of 2008 price of Crude oil crossed to US$100/barrel and touched approx US$147/barrel by end of the second quarter, this was huge growth of near by 47 percent in 3 months. The crude oil price led to a sustained price rise of derivatives products of polyester. Textile grade PET fibre producer in developed nations were under crunch as primary feedstock material price shoot up like anything in last June 2008. Price of PX in June was US$1620/ton in Korean market. Price of PTA increased to US$1175/ton by the same time period. Price of Ethylene increased till the month of July and achieved US$1650/ton, due to this MEG price raised up to US$1145/ton in June month and face tremendous pressure from buyers in July too. There was no one in market who can maintain there plant to run at full efficiency. Price raise also passed on to garment buyers where it was quite not acceptable. PET fibre price was adversely affected by high gasoline prices and reductions in travel during the summer beverage season too.
In the year 2008 total polyester production was estimated near by 47,000,000 ton in which china was tend to be dominate usually. In first half of the 2008 china produced approx 9.25%. The Chinese polyester production was increased by 7.5 percent and out put was increased by 11.10 percent compare to the same period in 2007. In Chinese market demand of imported polyester chips was decreased as domestic production was continuously replacing the import. During the January to May there was approx 37 percent drop in Chinese import, which was not noticed by the other polyester producing nation and overall production was still moving up. The Chinese textile export to U.S.A was declining which was also reflected as decline in import of polyester fibers approx 61,600 ton or 36 percent drop was noticed in Polyester staple fiber. On other hand PET fibre export was increased near by 22 percent compare to year the last year. The export value increased to US$239 million, with an increase of 37 percent. Total PET chip exported was 446200 ton, of total value US$610 million, but 37 percent raise in export was due to Bottle grade PET chips only.
Chinese Import from Taiwanese and Korean market was declined too. Korean Share in import of polyester was reduced near by 38.5 percent about 25,500 tons. Taiwanese exporter suffer bit more reduction, near by 37.4 percent near by 13300 ton. The major import reduction was in processing grade not in general textile grade yarn. The amount imported from all source countries was down compared with the same period in last year.
In second half of the 2008 due to impact of upstream and downstream sector and poor performance and economic slowdown drop of 24.53 percent in profit was recorded in textile grade polyester sector. Total loss of Polyester fibre industries surged to 48.5 percent near by. After the development and readjustment in recent years, a rising period started in the second half of 2006 and satisfactory economic performance was achieved in 2007. The slow down in export badly hurt the associates of textile industry.
In last quarter of 2008 Chinese government reshuffle the textile policy and increase rebate rate on textiles and garments. These changes also helped the textile chemicals fibres industries which also grow considerable. But growth was halted up to certain percent. Other Stimulus package was also announced by the government turn an important factor for Hualian Sunshine and Zhongheng Group who were on the verge of insolvency with the market turmoil. China's economy is expected to grow by about 9 percent this year but forecasters expect that to weaken in 2009. The World Bank has cut its 2009 growth forecast from 9.2 percent to 7.5 percent, it's lowest since 1990
Unsold textile grade PET and additional capacity build up by the Indorama polymers, AlphaPET, Mossi & Ghisolfi, and other which total is near by 1800,000 ton/year put huge pressure on sellers as growth prospectus of textile grade PET fiber is only 1.5 to 2.5 percent in next year. Still we have to consider the bitter truth that till mid of 2009 effect of meltdown will remain in all the countries including India and China which are least victims of meltdown. We expect that Europe and American continent will maintain there consumption at least.
We expect that in begging of the year 2009 sentiment of some polyester products is ready to rebound after sharp falls, though the overall market continues to remain weak. In the November, sales of PET Fibres/Yarns improved up to satisfactory level compare to sale/production ratio from the most producers.
Speculators lookout say that the upstream and downstream sectors come to its responsive level in the deadlock, which probably waiting for trigger to be pressed. Till date improvement is found due to combined dose of government's policies and tax rebates to rescue the market, it makes sense to see a slight increase of sentiment in the short term. However, the steroid injection imparted by government official is still remained weak in the long run on the back of global crisis. So, it is hard to say the market has already touched the bottom. If the global economic conditions do not improve, that would be drought in demand for textile industry. Significant hit in textiles exports and profits may weaken the trade in next year and same for textile fiber industry.
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