09 March 2011 23:53 [Source: ICIS news]
NEW YORK (ICIS)--The outlook for the US polyester market is positive through 2012 based on a continuing economic recovery, further growth in the Central America Free Trade Act (CAFTA) region, the gradually improving housing market and polyester raw material parity between the US and Asia, a consultant said on Wednesday.
Polyester costs have been increasing globally, but raw material costs in Asia have begun to exceed those in North America, said Michael Bermish, senior consultant at UK-based PCI Xylenes & Polyester, at a meeting of the the Societe de Chimie Industrielle in New York.
There is “no Asian raw material advantage,” he said.
Major feedstocks for polyester include paraxylene (PX), purified terephthalic acid (PTA) and monoethylene glycol (MEG).
Bermish noted that 2010 was a “spectacular year” for polyester filament, with 21% demand growth over 2009.
All the major segments of this market - apparel, home furnishings, industrial and carpet - “all did well in 2010,” he added.
Among the reasons Bermish cited as contributing to polyester's 2010 recovery were the general economic recovery, CAFTA region growth, the parity in raw material costs between Asia and the US, and low inventory coming out of the recession.
The limited supply of cotton is driving the use of more polyester for clothing products. The last cotton crop was severely impacted by bad weather, he said.
Meanwhile, cotton yields have plateaued. “More cotton will be a function of [increased] acreage - not yield.”
However, cotton is also competing with food for land. Food prices are high, and Bermish noted that “in most cases, the land will go towards food,” further driving polyester growth.
Cotton prices are projected to decrease in 2011-2012, although they will still be above average, said the consultant.
Demand for global textile fibre is expected to grow 3%/year from 2010-2015, with polyester fibre growth for the same timeframe at 4%/year, said Ronald Smith, chief financial officer of US-based polyester and nylon textile filament manufacturer Unifi, who also presented at the Societe meeting.
In 2010, 157bn lbs (71m tonnes) were sold in the global textile market, with polyester fibre’s market share at 47%. This is projected to increase to over 50% by 2015, said Smith.
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