If you buy a bottle of mineral water or other drinks, you will see the letters PET on the bottom of the bottle about 3 times out of 10. This shows that the plastic bottle is made of PET. PET is the English abbreviation of polyethylene terephthalate glycol. It has good light transmittance, light weight, friction and wear resistance and other characteristics. Bottles made of PET have the characteristics of high strength, good transparency, no leakage, and non-toxicity. They have great advantages over glass, metal and other materials in terms of production cost and transportation. No wonder more and more bottles are made of PET. Drinks come in bottles like this. At the same time, because the recycling rate is as high as over 93%, PET bottles also have good circular economic benefits.
From PTA to PET, the prices of the two are highly correlated
my country’s PTA output is close to 60% of global output, and the last three years have been big years for production capacity deployment. It is expected that an additional 11.1 million tons of production capacity will be added from 2022, and the total production capacity will exceed 70 million tons. Starting from 2023, PTA will enter a new round of industry-wide surplus cycle. By then, large devices will be profitable due to their higher efficiency and processing fees of around 300 yuan per ton, while small devices will inevitably face serious losses.
For large companies with high industry concentration, especially listed companies, they will be able to use their cost advantages during the industry’s excess cycle to further force out small production capacity and complete the integration of the industry.
As a downstream, the total production capacity of the polyester industry is only 57.5 million tons. With the expected increase of 2.15 million tons in 2022, the total production capacity will reach approximately 60 million tons. This year’s epidemic has combined with sluggish demand, and the polyester industry has three major highs. “High costs, high inventory, and high losses” are constantly driving down the industry’s operating rate, which in turn has led to a downturn in PTA prices.
This year, PTA and PET may have even greater difficulties ahead.
Weak growth in PET increases industry pressure on PTA
The main use of PTA is to produce PET, which accounts for 75% of polyester fiber, 20% of polyester bottle flakes, and 5% of polyester film. The PET bottles mentioned above account for one-fifth of the total PTA demand.
Polyester fiber, commonly known as polyester, is divided into filament and short fiber. The textile industry cannot do without polyester fiber. Although pure cotton products are generally popular, polyester fiber is more suitable for outerwear such as mountaineering clothing, sportswear, and jackets. Our country consumes about 9 million tons of cotton every year, but consumes 67 million tons of polyester fiber. Therefore, the downturn in the textile industry is a major blow to the chemical fiber industry.
This year, my country’s beverage industry also ushered in a year of low-speed growth. The annual beverage market is approximately 1.3 trillion yuan, and in 2021 alone, 210,000 new beverage companies will come to compete. The suppression of consumption caused by the epidemic has not yet changed significantly, and highly involved industries are also accelerating the survival of the fittest.
In the long term, the future development prospects of PET, whether as fiber or bottle flakes, are still relatively bright. However, the highly expanded PTA industry has surpassed the development speed of downstream and is heading towards surplus.
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