China polyester industry development trend forecast

Last year, under the impetus of high cotton prices, China's chemical fiber industry achieved a big harvest, especially the polyester industry has entered a "golden age." However, since 2011, the chemical fiber industry has been dominated by domestic and foreign macroeconomic policies and economic impacts such as the decline in cotton prices, the quantitative easing policies introduced by the United States, China’s insistence on tightening monetary policies, and the sharp fluctuations in international commodity prices such as crude oil. The polyester industry faces new challenges. In particular, PTA, which is the main raw material of polyester, bid farewell to the era of “profiteering” in September of this year, and the profit space has returned to rationality from “profiteering”.

After more than one year of gold development, what is the status of China's polyester industry? After PTA bid farewell to the “profiteering” era, what changes will happen to the raw material supply and demand pattern in the polyester industry? What is the development trend of China's polyester industry?

To address these issues, the 8th China International Polyester Forum hosted by the China Chemical Fiber Industry Association and China National Chemical Fiber Corporation, hosted by China Textiles Network and the UK Tycoon Global Chemicals Co., Ltd., was held in Shanghai from November 10 to November 11. More than 150 representatives from industry leaders, experts, and business leaders attended the meeting.

Rapid growth in production capacity

Under the background of large fluctuations in cotton prices, the polyester polyester industry has entered a “golden period,” and polyester production increased from 12.71 million tons in 2005 to 25.13 million tons, an increase of 97.7% with an average annual growth rate of 14.6%. It is 1.5 percentage points higher than the chemical fiber industry.

Last year, the large fluctuations in cotton prices made the chemical fiber industry “incredibly organic” and developed very well. In particular, the polyester polyester industry has entered a “golden period”.

Under this background, China's polyester polyester industry experienced rapid growth in production capacity, improved equipment technology, improved product structure, and promoted the rapid development of the industry. The industrial competitiveness has been rapidly improved.

Zheng Junlin, secretary-general of the China Chemical Fiber Industry Association, said that China's chemical fiber production in 2010 was 30.9 million tons, an increase of 85.6% over 2005 and an average annual increase of 13.1%. The polyester production increased from 12.71 million tons to 25.13 million tons, an increase of 97.7%, an average annual increase of 14.6%, and the growth rate was 1.5 percentage points higher than that of the chemical fiber industry. Polyester production has accounted for 81.3% of total chemical fiber production, which is 5 percentage points higher than that of 2005.

During the "Eleventh Five-Year Plan" period, China's complete set of polyester equipment has a total investment of 300 million to 350 million yuan, a large-capacity, high starting point, and low-cost domestically produced polyester project, achieving scale efficiency and short-range development. With the continuous advancement of polyester equipment technology, the profitability of the polyester polyester industry has also increased significantly. In 2010, the profit rate of chemical fiber industry reached 5.45%, 3.65 percentage points higher than that in 2005. The profit margin of the polyester polyester industry was significantly increased by 3.99 percentage points to 5.41%.

“Although the production capacity of polyester polyester industry in China has grown relatively fast during the past year, due to the relative lag in the development of polyester raw materials, some raw materials are heavily dependent on imports, which has affected the development of China's polyester industry to some extent.” Zheng Junlin stated that China’s imports in 2010 About 15.6 million tons of synthetic fiber raw materials, an increase of 28.2% over 2005, an average annual increase of 5.1%. The main raw material of polyester PTA, domestic production capacity developed rapidly, the shortage of contradictions can be eased quickly, and the degree of import dependence decreased from 54% in 2005 to 34% in 2009. However, MEG, another raw material of polyester, has a high degree of import dependence. During the “Eleventh Five-Year Plan” period, the degree of dependence on MEG imports has been above 70%, and it has also shown an upward trend in recent years, reaching 78% in 2010.

Raw material expansion faces multiple factors

With the rapid expansion of domestic PTA production capacity, the operating rate of PTA plant will show a downward trend, and profits will shift to PX. Therefore, the PX plant operating rate will be further improved based on this, expanding its production capacity. For MEG, due to its slow growth rate, foreign dependence will continue to increase.

For the polyester industry, raw materials are one of the important factors that affect the development of the polyester industry. At the meeting, Roger Lee, Executive Director of the UK Tycoon Global Chemicals Co., Ltd. described the global polyester raw material market such as PTA, PX, and MEG. He reviewed the current status of the global polyester raw material market and analyzed the data with detailed data. The problem of imbalance between production and demand brought about by later expansion.

In terms of PTA, with the successive construction of mainland China PTA plants, PTA import demand will further decrease, and PTA exporters in Korea and Taiwan will also face **. He analyzed that since PTA's capacity expansion rate is much faster than its demand rate, PTA's profits will also decrease step by step. In addition, the impact of the PTA** market on spot market prices will continue to deepen, which will exacerbate the fluctuations in the polyester industry chain, which in turn will have some impact on the market.

For PX, due to the rapid expansion of PTA capacity in Asia, it will also lead to a relatively tight supply of raw material PX. But RogerLee pointed out that compared to the terminal demand, the supply of PX is enough to meet the anticipated demand in 2012, and PX's profit can also maintain a good level.

In recent years, China’s dependence on MEG imports has been rising. Therefore, in the next few years, China will increase its capacity for MEG expansion, and these expansion projects will be concentrated in the field of coal chemical industry. RogerLee said that the construction of such projects needs to overcome many issues such as the economy and the environment. He also pointed out in particular that the high prices of crude oil and naphtha will further increase the pressure on Asian and European MEG prices.

In addition, Yan Yan, who has been engaged in research on the polyester filament market for many years in Chinatex, also analyzed the future development of polyester raw materials in China from a downstream perspective. She said that with the rapid expansion of domestic PTA production capacity, the PTA plant operating rate will decline, and profits will be transferred to PX manufacturers. Therefore, the PX plant operating rate will be further improved based on this, expanding its production capacity. For MEG, due to its slow growth rate, foreign dependence will continue to increase.

Product demand will increase further

Combined with the increase and decrease, it is expected that China's demand for polyester in 2015 will be 44.6 million tons, which is an average annual increase of 9.3% compared to 2010. It is expected that the demand for PTA in China will increase from 24.9 million tons in 2010 to 38.36 million tons in 2015 at an average annual rate of 9.3%.

Feng Jiajun, sales manager of Samsung Petrochemical (Shanghai) Co., Ltd., predicted the consumption of polyester products in China through the GDP model. He believes that the growth rate of China's polyester consumption will decline in the next five years, and the average annual growth rate is expected to remain around 9.6%.

In terms of polyester fiber, it is expected that per capita consumption of polyester fiber in China will reach 12.8 kg/person in the next five years, with a total of 17.8 million tons. The export of polyester fiber is 20.5 million tons, and the export share will be reduced.

In terms of PET bottles, it is expected that in the next five years, the consumption of PET bottles in China will increase from 3.2 million tons in 2010 to 5.37 million tons in 2015, with an average annual growth rate of more than 11%.

For the consumption of polyester film, Feng Jiajun predicts that it will continue to expand in the next five years and the application field will also change. "It is expected that there will be two major demand centers for packaging and electrical and electronic applications. By 2015, the total demand will be nearly 930,000 tons."

Based on the above analysis, Feng Jiajun believes that combined with the increase and decrease factors, it is expected that China's polyester demand in 2015 will be 44.6 million tons, which is an average annual increase of 9.3% compared to 2010. In the entire industry, the proportion of polyester fibers decreased from 87.1% in 2010 to 85.9% in 2015. At the same time, it is expected that the proportion of PET bottles will increase to 12.3% in 2015. The average annual growth rate of polyester demand decreased from 14.1% in 2005-2010 to 9.3% in 2010-2015. In addition, China's PTA demand is expected to increase from 24.9 million tons in 2010 to 38.36 million tons in 2015 at an average annual rate of 9.3%. The demand for PTA used to produce PET bottles increased by an average of 11.4% annually, and the demand for PTA used to produce chemical fiber increased by 9.0% on average annually.

After the meeting, relevant experts said in an interview with reporters that in the future China will continue to dominate the global polyester industry and play an important role in it. However, due to the current lack of optimism in the macroeconomic situation, the “era of the fool can earn money” in the polyester industry has ended, and the polyester industry will usher in a new round of reshuffling. In the future, the development of the polyester industry will manifest itself in two major characteristics. First, large-scale polyester companies will continue to maintain the upstream and downstream industrial chains and continuously increase their value. Second, small and medium-sized polyester companies will tend to differentiate their products and increase their added value.