08 November 2011 19:57 [Source: ICIS news]
MUMBAI (ICIS)--Global polyester demand growth is likely to remain robust this year despite a slowdown in the world economy, a UK consultant said on Tuesday.
“Polyester demand grew by 5.6m tonnes last year which was atypical; we all thought that growth in 2011 would be modest but we are again looking at a figure of over 4m tonnes,” Philip Gibbs, chairman of PCI Xylenes & Polyesters, said at the Indian Petrochem – 2011 conference.
Global polyester production is likely to touch 60m tonnes this year and grow to around 80m in 2015, he estimated.
However, a rapid addition to capacity, especially in China, would drag down operating rates from around 80% to 70% during this period.
The industry will have to cope with oversupply for the next two to three years, he added.
Asia, led by China, India and Indonesia, will drive global growth.
Gibbs said Asia is moving away from the traditional polyester consumption pattern of relying on textile exports to the Americas and Europe for growth.
“Seventy five percent of what China produces stays within the country; the domestic market is a driver for polyester. China is only now getting going and has another five to eight years of growth. It still has to get the wider population buying polyester,” he said.
Polyester is also expected to expand its share at the cost of cotton.
“Globally, fibre consumption is growing around 1.5times GDP; so if GDP expands by around 6% the world will need about 5m tonnes of additional fibre every year,” estimated Rajen Udeshi, president of the polyester chain at Reliance Industries.
But cotton availability is unlikely to grow significantly as competing crops offered better value to farmers and also because food security is more critical for governments.
“So global cotton production is likely to remain in the 23-24m tonnes range and the incremental requirement will have to come from polyester. For this the world will need an additional 3.5m tonnes of purified terephthalic acid [PTA], almost 1.0-1.5m tonnes of paraxylene [PX] and 1.5m tonnes of monoethylene glycol [MEG] every year,” he added.
However, an imbalance is emerging across the polyester chain as capacity additions in PX and MEG are lagging behind polyester and PTA.
The India Petrochem – 2011 conference, organized by Elite Conferences and the Chemicals and Petrochemicals Manufacturers Association (CPMA), concludes on Wednesday.
For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.
Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.
|ICIS news FREE TRIAL|
|Get access to breaking chemical news as it happens.|
|ICIS Global Petrochemical Index (IPEX)|
|ICIS Global Petrochemical Index (IPEX). Download the free tabular data and a chart of the historical index|