September 9, 2008

CMAI Completes 2009 World Terephthalates & Polyester Analysis

HOUSTON, Sept. 9 /PRNewswire/ -- Chemical Market Associates, Inc. (CMAI) recently completed the 2009 World Terephthalates & Polyester Analysis, an annual global study covering the period 2003 to 2013 for the terephthalates and polyester markets. The major polyester chain products covered include terephthalic acid (TPA), dimethyl terephthalate (DMT), polyester polycondensation, staple and filament, bottle resin (PET), polyester film, polytrimethylene terephthalate (PTT), polybutylene terephthalate (PBT) as well as other terephthalate derivatives. This study leverages all of CMAI's worldwide consultants to offer a global view of the major issues facing this important value chain, including:

   (Logo:    China answers terephthalic acid demand with major capacity expansions  

The first wave of TPA expansions in China was completed during 2007. The second wave of expansions is projected in 2009; another seven million metric tons of effective capacity will be added in the next three years. However, the demand will not increase by more than five million metric tons over the same period. Global operating rates may recover to 90 percent by the end of 2011. CMAI forecasts that at least four million metric tons of extra capacity would be added between 2011 and 2013, with three million tons in China. This analysis examines the coming wave of production capacity and the impacts on the resulting trade patterns.

Polyester fiber demand growth expected to slow

CMAI estimates Chinese polyester demand growth will account for more than three-quarters of the global total in 2008. CMAI's outlook analyzes expected future trends in polyester demand growth for China and the rest of the World.

In a downside case, Chinese polyester production could reduce by 500,000 metric tons based on CMAI's forecast. TPA operating rates in Asia will drop slightly as a result perhaps to 2006 levels. Global operating rates are also expected to slide in 2008. The probability of this downside scenario is getting higher with sustaining high crude oil prices. Demand growth will be inevitably affected by the economy slowdown and soaring inflation. Furthermore, with the expectation of high crude oil prices to stay, this downside scenario will likely last through 2009.

Middle East to add more TPA capacity to serve the PET bottle resin demand growth

PET bottle resin capacity will increase significantly in Central Europe, the CIS & Baltic States and the Americas aiming to serve strong regional demand. With fast growing PET bottle resin capacity, Europe was a net TPA importer, but as several TPA expansions projected to come on stream in Belgium, Portugal, Poland and Russia between 2008 and 2011, Europe will return to being a net exporter by 2011.

With readily available infrastructure in place and cost advantage of backward integration, the Middle East will likely add more TPA capacity near the end of 2013 to serve the PET bottle resin demand growth in the region. The Middle East will continue to remain as one of the major TPA importers for the next five years.

CMAI's 2009 World Terephthalates & Polyester Analysis is available in book and CD-ROM format and includes technology analysis, trade, price forecasts as well as other pertinent issues in relation to the polyester value chain. Online Capacity and Supply/Demand databases create a full spectrum of knowledge pertinent to these markets.

CMAI is a petrochemical, plastics, fibers and chlor-alkali consulting firm that services a wide range of companies all over the world. Since 1979, CMAI's goal has been to provide accurate, timely consulting services for the worldwide industries that it covers. CMAI maintains offices in Houston, New York, London, Dubai, Dusseldorf, Singapore and Shanghai. Clients to CMAI services include chemical and oil companies, engineering & construction companies, banking and financial institutions, plastic converters, grocers/retailers, government agencies and trading companies.

                                Anne Geraci                                    CMAI                       11757 Katy Freeway, Suite 700                          Houston, TX 77079 U.S.A                  Tel: 1-281-531-4660 Fax: 1-281-531-9966                       Email: [email protected]  

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Chemical Market Associates, Inc.

CONTACT: Anne Geraci of Chemical Market Associates, Inc.,+1-281-531-4660, fax, +1-281-531-9966, [email protected]

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