China's PTA market may undergo consolidation in 2012-2013

04 July 2011 08:57  [Source: ICIS news]

HONG KONG (ICIS)--The Chinese purified terephthalic acid (PTA) market might undergo a consolidation between 2012 and 2013, with stand-alone producers to come under pressure, an official from the country's second-largest producer of the fibre intermediate said on Monday.

"The rate of expansion of PTA capacities in 2012 and 2013 is likely to outpace demand growth from the downstream sectors," said Li Gang, manager of Sinopec’s Synthetic Source & Synthetic Fiber department in his keynote speech at the Global PX-Polyester Chain Focus 2011 conference held in Hong Kong.
"Coupled with the expected tightness in paraxylene [PX] supply, the industry might have to undergo a painful consolidation period,” he added.
According to ICIS data, nearly 7m tonnes of new PTA capacities will come on stream in 2012, while a mere 2m tonnes of new PX projects are expected in the same period.
Most market participants are expecting the Asia PX market to be tightly supplied in the second-half of 2011 going into 2012.
"During this consolidation period within the PTA market, we will likely see the integrated players survive, while the stand-alone producers will get weeded out,” said Gao Xiang, manager of SK Network’s Fibre Intermediates Team.
The Global PX-Polyester Chain Focus 2011 conference runs from 4-5 July.

By: Bohan Loh
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