25 June 2001 00:00 [Source: ICB]
Strong demand growth and limited capacity expansions look
set to tighten European markets over the next two years
Polyethylene terephthalate (PET) can be made into resin or film.
PET resin's main use is in bottled soft drinks with rapid growth in
the bottled water market. It is also used to package food and in
European markets are expected to tighten over the next two years
with continued strong demand growth and limited capacity
expansions. Total European production was 1.57m tonne in 2000 out
of an effective capacity of 1.88m tonne with consumption at 1.83m
tonne, according to Tecnon Orbichem. Utilisation rates were 83.5%
last year and total European capacity will reach just under 2.2m
tonne by the end of 2002, noted Tecnon Orbichem. Anti-dumping
duties imposed in December 2000 have had some impact on reducing
Asian imports, with one or two Asian suppliers now facing
prohibitive duties. However, other Asian suppliers continue to
export to Europe and a 40% increase in Asian material is reported
into eastern Europe in January/February this year compared to 2000.
Most of Europe had a disappointing second quarter because of poor
weather. Eastman was forced to reduce output across its plants in
June/July. DuPont recently announced the sale of its US PTA/PET
resin interests to Mexico's Alpek.
Producers say quarter two prices averaged DM2.60-2.70/kg. Some
major suppliers have announced they will be seeking a rise of
DM100/tonne from 1 July, mainly in an attempt to recover the
anticipated increase in feedstock costs. An early quarter three
paraxylene contract has been agreed at a E73/tonne increase,
although it is unclear whether this will be accepted by the market.
Margins were said to be close to reinvestment economics in quarter
two, but are likely to be pressured again next quarter as producers
face an uphill struggle pushing through price increases.
Pure terephthalic acid (PTA) and monoethylene glycol (MEG) are
reacted to make a basic ester which is polymerised in a melt phase,
polycondensation finishing reactor operating under heat and vacuum.
The molten polymer is extruded, cut into chips and cooled. The
chips pass to a solid state polycondensation unit which is an
annealing process to form the resin. New catalysts are being
developed to reduce the esterification time. Researchers are also
looking for ways to remove the solid state polycondensation stage.
Synetix has unveiled a new titanium catalyst which works in both
the esterification and polycondensation processes that can increase
yields by 15% compared to existing antimony catalysts. DuPont's
sale to Alpek includes a licence to use DuPont's technology and the
Melinar and Laser+ brand names in the Americas.
Health and safety
PET poses a low risk to human health and the environment. It has
very low toxicity, and even under exaggerated conditions of
exposure, migration of components from PET packaging materials into
food is extremely low. PET can react with strong oxidising agents
and powdered material may form explosive dust-air mixtures. Molten
material will produce thermal burns.
Forecast growth is strong at 10-11%/year in Europe and worldwide
to 2005. Between 2005-10 Tecnon Orbichem rates European growth at
8.5%/year. Some small capacity expansions will come onstream by end
2001 and Moscow-based Sibur will commission Russia's first plant in
quarter four (see table). DuPontSa is raising capacity at Adana to
100 000 tonne/year by early 2002 and is still evaluating a
worldscale plant in Europe. KoSA also plans a 150 000 tonne/year
plant in Europe but is delaying a decision as players are
predicting a trough in 2004-05.
EUROPEAN PET CAPACITY '000 TONNE/YEAR
||Prat de Llobregat, Spain
||Indust. Zone Volos, Greece
||Senica nad Myjavou, Slovakia
1 owned by Mossi & Ghisolfi2 Mossi
& Ghisolfi/Marubeni jv3 includes PETG4
includes 60 000 added end 20015 includes 30 000 added
end 20016 includes 30 000 added Q3 20017
start-up end 2001Source: Tecnon Orbichem
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