China To Expand Polyester Capacities

Trade & Policy

China To Expand Polyester Capacities

After a restructuring during 2012-2015, China's polyester industry is stepping into new prosperity cycle and profits recover obviously, almost parallel with that in 2010-2011. Some leading companies take the opportunity to restart old units through mergers and acquisitions to gain profits rapidly and meanwhile make up the shortage of new capacity.

Polyester capacity accumulates to 4.2 million tons/year in 2017, including 2.5 million tons/year from new polymerisation plants and 1.7 million tons/year from old ones. With the old plants which shut down in 2015-2016 restarting, the operating rate of polyester industry improves.

Good profits quicken the startups of new plants including those postponing operation previously. Around 4.8 million tons/year new capacity with signed equipment contract and ongoing construction is scheduled to start up in 2018. According to the timeframe, new capacity will be put into operation intensively in Q2, 2018. In addition, polymerisation plants planned to start up in 2019 will contribute a capacity of around 4.5 million tons/year. Most of them signed contract but have not conducted construction yet. Therefore, exact time to start up is uncertain.

According to current operating plans of new capacity, polyester capacity will expand in 2018 and 2019 again with new capacity concentrated in megaton producers, which will further increase the capacity concentration.

Market shares of megaton polymerization companies expand quickly from 12% in 2005, 47% in 2015 and 65% in 2019. There will be 15 megaton polymerisation companies in 2019, including seven with capacity over two million tons/year, accounting for 47% of total capacity.

Their market shares will expand further, especially those with capacity of over two million tons/year after 2019.