Global polyester demand scaling new peaks

Globally, polyester has established its supremacy over other manmade fibres (MMFs) even as MMFs have been offering tough competition to cotton in meeting the raw material requirements of the industry. This becomes very much clear if one goes by the studies carried out in this regard by Mr Peter Driscoll, managing director, PCI Fibres.

According to him, global demand for polyester filament is so strong in the world that over the next 10 years it can be expected to reach 25 million tonnes from about 14 million tonnes at present. Of the estimated increase in demand, the world without China may account for three million tonnes, while India may account for half of this three million tonnes.

In China, the polyester filament market is growing at more than 8 per cent per annum though some cyclical slow down, say, around 2008 is not ruled out. By that time China might be having some surplus production of polyester filament for release in the world market, and polyester feed stock prices are also expected to ease. If this happens, very competitive situation might emerge in the world market for polyester filament.

In other parts of Asia also, the mill demand for polyester filament is expected to grow, but much will depend on India. If India and China are excluded, the Asian volume over the next 10 years can be expected to move up by just one million tonnes from 3.3 million tonnes at present. In that case, the possibility of some under utilisation of capacity cannot be ruled out. This is because the new capacities are being set up at a much faster pace.

For instance, China is seen expanding its annual capacity from 10.7 million tonnes in 2004 to 20 million tonnes by 2014. It is also predicted that by 2020, the Chinese capacity for polyester filament alone may exceed 25 million tonnes, which might be close to production level of cotton worldwide.

India is likely to double its polyester filament capacity over that period from the present 1.4 million tonnes. However, Japan, South Korea and Taiwan are expected to reduce their capacities. Other parts of Asia may, however, add some capacity. Such additions may be of the order of four lakh tonnes per annum (mainly in Indonesia and Vietnam).

A similar growth pattern is likely in polyester staple fibre (PSF) as well, with China leading the table. In the next 10 years, China is expected to double its polyester staple fibre capacity from 5.2 million tonnes now. During the same period, India is likely to add a million tonnes to its 700,000 tonnes, while Indonesia and Vietnam are expected to add 200,000 tonned each.

The global demand for PSF is expected to grow a little more slowly than that of polyester filament, at 5 per cent per annum. There will, however, be variation in demand growth rate in the consuming countries.

Also, China will be the main market for PSF with demand growth of 7 per cent per annum. In 2004, its share in the global market for polyester staple fibre was around 47 per cent. This is expected to rise to 57 per cent by 2014. As in the case of polyester filament, a cyclical slowdown may take place around 2008. Thereafter, China may have surplus production of PSF for exports to the world market.

In the rest of Asia, mill demand for polyester staple fibre is likely to recover in due course as China is expected to consume more raw material at every level of the textile system. It is hoped that Asian textile activity may grow quite strongly along side China, led by India and Pakistan. This may help in improving the operating rates which have been declining lately.

Within this group, the mill demand for PSF over the next 10 years is expected to grow in India by more than 700,000 tonnes. It may, however, decline in Japan, South Korea and Taiwan by about 200,000 tonnes. In the rest of Asia led By Pakistan, it may grow just over one million tonnes.

It is predicted that after 2006, fibre demand may come down sharply as a result of easier feedstock supply and a cyclical slowdown in China and expected over capacity, particularly in polyester filament.

Among other synthetic fibres, the world demand for acrylic fibre is growing at the rate of 2 per cent. Uptill now the demand growth was constrained by lack of capacity growth. This situation is likely to be over soon. Acrylic demand in China is growing at the rate of 4.5 per cent, but outside China it is expected to move down rather than up. Acrylic will be dependent on the Chinese market which may grow from 1.2 million to 1.9 million tonnes in the next 10 years. In the case of nylon, the global growth is even lower than acrylic at just 1.3 per cent per annum. The Chinese market is growing at the rate of 5.3 per cent and may add over the next 10 years about 600,000 tonnes. The rest of Asia may witness a decline during that period to the extent of 200,000 tonnes.

M D Dewani