Skip to main content
Sister Publication Links
  • Sustainable Plastics
  • Rubber News
Subscribe
  • Login
  • Register
  • Subscribe
  • News
    • Processor News
    • Suppliers
    • More News
    • Digital Edition
    • End Markets
    • Special Reports
    • Newsletters
    • Resin pricing news
    • Videos
    • Injection Molding
    • Blow Molding
    • Film & Sheet
    • Pipe/Profile/Tubing
    • Rotomolding
    • Thermoforming
    • Recycling
    • Machinery
    • Materials
    • Molds/Tooling
    • Product news
    • Design
    • Mergers & Acquisitions
    • Sustainability
    • Public Policy
    • Material Insights Videos
    • Numbers that Matter
    • Automotive
    • Packaging
    • Medical
    • Consumer Products
    • Construction
    • CEO Issue
    • Diversity
    • Best Places to Work
      • 2022 winners
    • Processor of the Year
    • Rising Stars
    • Women Breaking the Mold
      • 2022 class
  • Opinion
    • The Plastics Blog
    • Kickstart
    • One Good Resin
    • Pellets and Politics
    • All Things Data
    • Viewpoint
    • From Pillar to Post
    • Perspective
    • Mailbag
    • Fake Plastic Trees
  • Shop Floor
    • Blending
    • Compounding
    • Drying
    • Injection Molding
    • Purging
    • Robotics
    • Size Reduction
    • Structural Foam
    • Tooling
    • Training
  • Events
    • K Show Livestream
    • Plastics News Events
    • Industry Events
    • Injection Molding & Design Expo
    • Livestreams/Webinars
    • Editorial Livestreams
    • Ask the Expert
    • Plastics News Events Library
    • Processor of the Year submissions
    • Plastics News Executive Forum
    • Injection Molding & Design Expo
    • Plastics News Caps & Closures
    • Women Breaking the Mold Networking Forum
    • Plastics in Automotive
    • PN Live: Mergers and Acquisitions
    • Polymer Points Live
    • Numbers that Matter Live
    • Plastics in Politics Live
    • Sustainable Plastics Live
    • Plastics Caps & Closures Library
    • Plastics in Healthcare Library
    • Women Breaking the Mold Networking Forum Library
  • Resin Prices
    • All Resins
    • Commodity TPs
    • High Temp TPs
    • ETPs
    • Thermosets
    • Recycled Plastics
    • Historic Commodity Thermoplastics
    • Historic High Temp Thermoplastics
    • Historic Engineering Thermoplastics
    • Historic Thermosets
    • Historic Recycled Plastics
  • Rankings & Data
    • Injection Molders
    • Blow Molders
    • Film Sheet
    • Thermoformers
    • Pipe Profile Tubing
    • Rotomolders
    • Mold/Toolmakers
    • LSR Processors
    • Recyclers
    • Compounders - List
    • Association - List
    • Plastic Lumber - List
    • All
  • Directory
  • Custom
    • Sponsored Content
    • LS Mtron Sponsored Content
    • Conair Sponsored Content
    • KraussMaffei Sponsored Content
    • ENGEL Sponsored Content
    • White Papers
    • Classifieds
    • Place an Ad
    • Sign up for Early Classified
MENU
Breadcrumb
  1. Home
  2. News
News
April 08, 1996 02:00 AM

PET SUPPLIERS TO GREATLY INCREASE CAPACITY

Bruce Vernyi
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print

    HOUSTON - Even with PET markets in a temporary lull caused by overcapacity, industry executives and analysts expect demand to grow 12 percent a year, taking up some of the slack. While 1994 and 1995 were years marked by pricing spikes, prices this year for PET and related resins are receding somewhat because the supply outlook for raw materials - terephthalic acid, its precursor, paraxylene, and ethylene glycol - has improved greatly.

    ``Capacity [for PET] over the next three years will increase by over 50 percent, with an estimated 13.7 million pounds of capacity to be on line by the end of 1997,'' said Edgar F. Acosta, market analyst for PET resins for Dewitt & Co. Inc. of Houston. Acosta spoke March 20 at the Dewitt Petrochemical Review in Houston.

    ``With this increase in capacity, a decrease in operating rates is expected and, with that, comes pricing activity until all new production can be absorbed.

    ``Despite the recent dip in the world PET market pricing, companies such as Shell, Hoechst, Eastman, ICI, Nan-Ya Mitsubishi, SABIC and Kohap are looking to the long term to capitalize on the explosive growth of PET resin,'' Acosta said.

    While those companies look to capitalize on the growth of PET, they may squeeze smaller companies out of the market in a consolidation that also will replace older production capacity with newer, more efficient capacity, he added.

    A year ago, Richard Oblath said, no one expected PET prices to retreat, and industry executives and analysts predicted shortages of raw materials and PET well into the future. Oblath is general manager for the polyester business for Shell Chemical Co. of Houston.

    Oblath spoke March 21 at the 1996 World Petrochemical Con-ference sponsored by CMAI in Houston.

    The key raw materials for PET today are in balance and, Oblath said, the industry expects to have adequate supplies for the long term because record high prices reached for those raw materials made suppliers tweak old capacity to produce more while they built - or announced they intend to build - new capacity.

    ``Supply/demand was very tight in 1995,'' Oblath said.

    ``If one assumes that all the announcements or rumored announcements of new polyester capacity are correct, then there will be oversupply in the near future which will continue for some time.

    ``This is especially true of Asia, where there appears [there will be] twice as much supply as regional demand by the year 2000,'' Oblath said.

    He noted that there are questions about how many of the announced expansions actually will be built, and how the various suppliers will position themselves.

    He echoed Acosta's remarks about a consolidation of the industry, saying issues about manufacturing efficiencies and economics will present themselves when - and if - all the new capacities are put into production.

    ``What will happen to less efficient facilities? How much capacity may be idled? In addition, there are increasing demands on product quality and consistency. None of these questions have been factored into the supply/ demand equation,'' Oblath said.

    While PET is used in sheet and film applications, the largest applications are in bottles and rigid containers.

    PET containers have replaced almost all glass bottles used for very large carbonated soft drink packaging and, because of the thorough market penetration, sales to that market have flattened out in North America. In Europe, PET containers have replaced, or are replacing, glass and PVC in many soft drink and bottled-water applications, he added.

    However, Oblath said PET packaging now is moving into markets for single-serving soft drinks, replacing aluminum cans.

    Also, PET packaging is moving into markets for custom packaging materials, markets now dominated by glass, PVC and poly-propylene.

    Further, improvements to PET performance characteristics are increasing the resin's competitive position against glass and other materials in applications for hot-filling and in which improved moisture and gas-permeation barriers are required.

    One minor adverse market condition Oblath noted is increased competition from other polyester resins, such as polyethylene naphthalate. Even with increased competition, Oblath said that Shell Chemical expects demand for PET resins to grow by 12 percent per year for the next five years, and for that demand to soak up the increased production capacity.

    RECOMMENDED FOR YOU
    Poly-America neighbors sue for $7.8M after 2020 fire, allege respiratory damage
    Letter
    to the
    Editor

    Do you have an opinion about this story? Do you have some thoughts you'd like to share with our readers? Plastics News would love to hear from you. Email your letter to Editor at [email protected]

    Most Popular
    1
    Industry's newest concern: Public opposition to plastics recycling
    2
    PepsiCo cuts bottle design costs, time with 3D printed mold inserts
    3
    Unsupervised worker blamed for overriding alarms in Michigan chemical spill
    4
    More volatility for North American PS, ABS resin prices
    5
    AdvanSix sees strong sales in Q2, expects healthy demand for nylon in US
    SIGN UP FOR TO RECEIVE THESE EMAILS AND ENEWSLETTERS
    EMAIL ADDRESS

    Please enter a valid email address.

    Please enter your email address.

    Please verify captcha.

    Please select at least one newsletter to subscribe.

    Get our newsletters

    Staying current is easy with Plastics News delivered straight to your inbox, free of charge.

    Subscribe today

    Subscribe to Plastics News

    Subscribe now
    Connect with Us
    • LinkedIn
    • Facebook
    • Twitter
    • Instagram

    Plastics News covers the business of the global plastics industry. We report news, gather data and deliver timely information that provides our readers with a competitive advantage.

    Contact Us

    1155 Gratiot Avenue
    Detroit MI 48207-2997

    Customer Service:
    877-320-1723

    Resources
    • About
    • Staff
    • Editorial Calendar
    • Media Kit
    • Data Store
    • Digital Edition
    • Custom Content
    • People
    • Contact
    • Careers
    • Sitemap
    Related Crain Publications
    • Sustainable Plastics
    • Rubber News
    • Urethanes Technology
    • European Rubber Journal
    • Tire Business
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Copyright © 1996-2022. Crain Communications, Inc. All Rights Reserved.
    • News
      • Processor News
        • Injection Molding
        • Blow Molding
        • Film & Sheet
        • Pipe/Profile/Tubing
        • Rotomolding
        • Thermoforming
        • Recycling
      • Suppliers
        • Machinery
        • Materials
        • Molds/Tooling
        • Product news
        • Design
      • More News
        • Mergers & Acquisitions
        • Sustainability
        • Public Policy
        • Material Insights Videos
        • Numbers that Matter
      • Digital Edition
      • End Markets
        • Automotive
        • Packaging
        • Medical
        • Consumer Products
        • Construction
      • Special Reports
        • CEO Issue
        • Diversity
        • Best Places to Work
          • 2022 winners
        • Processor of the Year
        • Rising Stars
        • Women Breaking the Mold
          • 2022 class
      • Newsletters
      • Resin pricing news
      • Videos
    • Opinion
      • The Plastics Blog
      • Kickstart
      • One Good Resin
      • Pellets and Politics
      • All Things Data
      • Viewpoint
      • From Pillar to Post
      • Perspective
      • Mailbag
      • Fake Plastic Trees
    • Shop Floor
      • Blending
      • Compounding
      • Drying
      • Injection Molding
      • Purging
      • Robotics
      • Size Reduction
      • Structural Foam
      • Tooling
      • Training
    • Events
      • K Show Livestream
      • Plastics News Events
        • Plastics News Executive Forum
        • Injection Molding & Design Expo
        • Plastics News Caps & Closures
        • Women Breaking the Mold Networking Forum
        • Plastics in Automotive
      • Industry Events
      • Injection Molding & Design Expo
      • Livestreams/Webinars
        • PN Live: Mergers and Acquisitions
      • Editorial Livestreams
        • Polymer Points Live
        • Numbers that Matter Live
        • Plastics in Politics Live
        • Sustainable Plastics Live
      • Ask the Expert
      • Plastics News Events Library
        • Plastics Caps & Closures Library
        • Plastics in Healthcare Library
        • Women Breaking the Mold Networking Forum Library
      • Processor of the Year submissions
    • Resin Prices
      • All Resins
      • Commodity TPs
        • Historic Commodity Thermoplastics
      • High Temp TPs
        • Historic High Temp Thermoplastics
      • ETPs
        • Historic Engineering Thermoplastics
      • Thermosets
        • Historic Thermosets
      • Recycled Plastics
        • Historic Recycled Plastics
    • Rankings & Data
      • Injection Molders
      • Blow Molders
      • Film Sheet
      • Thermoformers
      • Pipe Profile Tubing
      • Rotomolders
      • Mold/Toolmakers
      • LSR Processors
      • Recyclers
      • Compounders - List
      • Association - List
      • Plastic Lumber - List
      • All
    • Directory
    • Custom
      • Sponsored Content
      • LS Mtron Sponsored Content
      • Conair Sponsored Content
      • KraussMaffei Sponsored Content
      • ENGEL Sponsored Content
      • White Papers
      • Classifieds
        • Place an Ad
        • Sign up for Early Classified