[Polyester Session]Polyester feedstock market supply/demand forecast in Asia
！！Wang Weidong, from Argus
2019-03-21 16:29:14
Wang Weidong, from Argus, delivers his report of Polyester feedstock market supply/demand forecast in Asia.
Mr. Wang states the PTA and MEG capacity distribution in Asia, and points out that syngas-based MEG sees explosive growth in China, leading to decline of MEG price and profits to several years¨ low. PTA prices and profits improved. For demand, polyester demand growth slows in China, and the slower real estate sales may affect polyester demand, but the demand keeps high growth in India. China¨s PTA and MEG welcomes a new round of investment. Besides, Taiwan PTA export moves up sharply and it is expected to keep increasing in 2019, but the target market will gradually shift to Vietnam.
Conclusion:
1. In 2019, Asian PTA market will see balanced supply and demand on the whole, with slight tightness in the first half year. After 2020, as PTA plants start up in China, the supply increases and O/R declines, China will be a net exporter of PTA.
2. For MEG, syngas-based MEG in China will take more shares, weighing on MEG producers which purchase ethylene from overseas market. The new capacity in North America and Middle East will affect the naphtha-based MEG units before and after 2020, and it may restrict the syngas-based MEG O/R.
3. The continuous increase in India and Vietnam will partly set off the impacts of slower growth in China, keeping overall PTA and MEG demand growth at high level.
4. The concentration of the whole polyester industrial chain and downstream textile and apparel industry in Asia is expected to improve.
Mr. Wang states the PTA and MEG capacity distribution in Asia, and points out that syngas-based MEG sees explosive growth in China, leading to decline of MEG price and profits to several years¨ low. PTA prices and profits improved. For demand, polyester demand growth slows in China, and the slower real estate sales may affect polyester demand, but the demand keeps high growth in India. China¨s PTA and MEG welcomes a new round of investment. Besides, Taiwan PTA export moves up sharply and it is expected to keep increasing in 2019, but the target market will gradually shift to Vietnam.
Conclusion:
1. In 2019, Asian PTA market will see balanced supply and demand on the whole, with slight tightness in the first half year. After 2020, as PTA plants start up in China, the supply increases and O/R declines, China will be a net exporter of PTA.
2. For MEG, syngas-based MEG in China will take more shares, weighing on MEG producers which purchase ethylene from overseas market. The new capacity in North America and Middle East will affect the naphtha-based MEG units before and after 2020, and it may restrict the syngas-based MEG O/R.
3. The continuous increase in India and Vietnam will partly set off the impacts of slower growth in China, keeping overall PTA and MEG demand growth at high level.
4. The concentration of the whole polyester industrial chain and downstream textile and apparel industry in Asia is expected to improve.
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