Product profile: PET

21 October 2002 00:00  [Source: ICB]

The European market is suffering from poor profitability and consolidation is urgently required but represents a major challenge


Polyethylene terephthalate (PET) can be made into resin or film. PET resin's main use is soft drinks bottles but its use in the bottled water market has grown dramatically. Other bottles and containers include edible oils and pharmaceuticals. PET film is used in packaging and in electrical applications as dielectric metal foil capacitors.


Demand in Europe this year is expected to be up by about 8% on 2001. Increased implementation of PET in Germany has strengthened consumption there and demand in central and eastern Europe has also increased. However, markets in Spain and Italy have been weaker because of a poor summer. Supply is reported to be fairly balanced.

Europe requires imports of about 200 000-300 000 tonne/year which are mostly sourced from Asia. Asian volumes have not been huge this year and exports to western Europe declined to 102 000 tonne in the first half of 2002, from about 120 000 tonne in first half 2001, according to Tecnon OrbiChem. Low Asian prices, particularly on Chinese product, which is exempt from duties, is a concern to European suppliers and is undermining their attempts to lift price levels. However, aggressive marketing by European producers has also hindered attempts to improve local prices.


European contract prices, which rose in quarter two to E1150-1280/tonne FD in northwest Europe for bottle grade resin, slipped back in quarter three to E1050-1100/tonne in September. Producers are targeting a E100/tonne increase in October in a bid to improve poor margins and, so far, claim to have achieved between a rollover and an increase of E30/tonne. Discussions are continuing with buyers and producers say the E100/tonne rise is still a target for quarter four. However, price increases in this quarter generally have a poor success rate.


Pure terephthalic acid and monoethylene glycol 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. Both continuous and batch processes are available for the polymerisation.

New processes are under development to produce material with different physical properties and new catalysts are being developed to reduce the esterification time. Researchers are also looking for ways to remove the solid state polycondensation stage. DuPont and Fluor Daniel have developed the NG3 process which is claimed to reduce the number of steps from six to four with resultant savings in capital and manufacturing costs. European producers are looking at recycling technologies. Eastman has a process that breaks PET down into its basic components and creates a virgin material and Wellman has technology to produce recycled PET (EcoClear) for use in food or drink packaging.

Health and safety

PET is a non-hazardous material. However, it can react with strong oxidising agents and powdered material may form explosive dust-air mixtures. Molten material will produce thermal burns.


European demand growth is talked at 8-10%/year. Consumption in central and eastern Europe is higher at double-digit figures, while west European markets are more mature with rates at 1-2% above GDP. The increasing presence of Chinese material is an issue for the European market as China will soon have surplus capacity of 1m tonne/year.

New plants are planned for 2004 by Dow in Germany, and the Anwil/SK partnership in Poland. In Russia, Polief and Sibur plan new capacity in 2003 and 2006 respectively.

Consolidation is badly needed in Europe where there are too many players and market competition is undermining profitability. Most of the smaller, less efficient plants are in southern Europe where there is the greatest potential for consolidation. A move between any of the seven smaller players, which combined account for 23% of the market, is more likely than a merger among the largest producers. However, any firm moves are thought to be unlikely in the short term.

European PET capacity, '000 tonne/year
Company Location Capacity


Udine, Italy 60


Barbastro, Spain 85

Catalana de Polimers

El Prat de Llobregat, Spain 100


Anagni, Italy 70

Cray Valley Iberica

Barcelona, Spain 4

Dow Chemical

Schkopau, Germany 160


Adana, Turkey 115
Wilton, UK 210


Torun, Poland 50

Inca (Dow)

Ottana, Italy 105
Pisticci, Italy 55

Italpet Preform

Pallanza, Italy 100

Khimvolokno Mogilev

Mogilev, Belarus 40

Korteks Mensucant Sanayi ve Ticaret

Bursa, Turkey 4


Gersthofen, Germany 55
Offenbach, Germany 210

M&G Polimeri Italia

Patrica, Italy 193

PET Processors (UK)

Dumfries, UK 20

Slovensky Hodvab

Senica, Slovakia 5

Tergal Fibers

Gauchy, France 50


Iasi, Romania 10

Trevira Fibras

Portalegre, Portugal 35


Rotterdam, Netherlands 160
San Roque, Spain 160
Workington, UK 130


Volos, Greece 60


Emmen, Netherlands 60

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