Polyester in China: how the G20 drives down production


2016 is set to go down as the a low-performing year for China's polyester industry. Struggling to retain total polymerisation production of 15m tonnes for the first five months of the year, just 40% of the year’s original estimate of almost 39m tonnes, the sector is on track to achieve 4-5% growth year-on-year. This is lower than we have seen in recent years, although it remains globally competitive. Now, the G20 Summit in the industrial powerhouse of Hangzhou is obliging nearby manufacturers to shut down facilities in August to ensure clean air for the world’s leaders.

Hangzhou is China's industrial heartland. The manufacturing freeze is affecting the entire polyester pipeline, from refiners to PTA and MEG producers, to textile and garment makers. Already paraxylene/naphtha spreads have dropped below $400. PTA producers are making significant losses. Even the MEG price collapsed in Q2 this year.

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PCI Wood Mackenzie has assessed the industry's outlook for the rest of the year to answer the important questions facing your business.

  • What is the outlook for China's polyester industry?
  • Is 2016 lost, or will markets rebound even after the haitus of the G20 meetings?
  • As recently as 2012, polyester production in China rocketed, with new capacity onstream and rising pricing and profits. The polyester industry cyclical – but how long will the bear market last?
  • When the resurgence does come, what will it look like?

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To discover more about how we can help you make the most of growth opportunities in the chemicals sector, email chemicals@woodmac.com