PETpla.net Insider 01+02 / 2010

MATERIAL / RECYCLING 15 PET planet insider Vol. 11 No. 01+02/10 www.petpla.net by knowing and understanding these relationships is it possible to recog- nise the right time to buy PET at the most advantageous price,” empha- sised Zanchi. Crude oil: Increasing demand and higher shipping costs are driving prices In his presentation on “A Global Overview of Polyester Raw Materi- als” Sanjay Sinha from the Indian company Reliance Industries Ltd. of Mumbai, expressed the view that the price of crude oil would in future stabi- lise at a high level. His reason for this view is that he believes the demand for oil will continue to rise because the global Gross Domestic Product (GDP) will continue to grow. “The growth in global GDP may have been slowed down by the financial crisis, but by the end of 2009 the world will see a more stable situation and a sustained growth trend in the coming years, which would mean renewed growth in the demand for oil. There is a clear relationship between the global GDP and the demand for oil,” said Sinha. This scenario will impact on future oil prices, and in addition there is the dif- ficulty of new oilfields which are often in inaccessible parts of the globe and so the extraction and transport costs will be higher. The difficult acces- sibility of new oil reserves and the continued growth in demand will lead, in Sinha’s opinion, to the price of a barrel of crude oil hovering at around 60 to 70 Dollars per barrel. Polyester, including fibres as well as PET resin for the production of film or bottles, will continue to enjoy strong levels of demand, believes Sinha. He forecasts the growth in demand at 4 to 6%, mainly based on demand in Asia, and in particular in China. The precur- sors too, which are used to produce polyesters, will see growing demand based on this prognosis. The sub- stances in question here are paraxy- lene (PX), terephthalic acid (PTA) and monoethylene glycol (MEG). Polyester: Moderate growth in packaging applications - higher demand for fibres Roger Lee, Managing Director of Tecnon OrbiChem Ltd., London, put forward separate scenarios when looking at the demands for polyes- ter for packaging and for the textile industry. He stated in his presentation that global production of PET for the packaging industry was growing by 9% per annum before the global finan- cial crisis. In 2008 the growth rate was only 3.3% and during 2009 was expected to reach 4.4%. For 2010 Lee forecast a 6.3 growth rate. He also pointed out that in the Far East there was a lot of new production capacity, either already available or planned. In Europe and North America however the trend was in the opposite direc- tion - more and more PET production capacity was standing idle, or perma- nently shut down for various reasons (technical or financial). Lee was of the view that PET for packaging applications would not grow so strongly and that only moder- ate rates of growth in relation to the global GDP were to be expected. He based this view on, amongst other things, the fact that the demand for virgin PET for beverage bottles was falling (e.g. a result of the light-weight- ing of bottles, and because distribu- tors and drinks bottlers were demand- ing the use of a higher percentage of recycled PET for reasons of sustain- ability). Despite moderate growth of PET use in packaging applications the EU would in future be obliged to rely to a greater extent on imported resin. “The plant closures and the uncer- tainty surrounding European and American production plants, plus the new or planned capacities in the Far East, mean that in the next two years 48 to 49% of world PET production for packaging would come from the Far East. “The EU will therefore be obliged to import resin to cover demand, “ he explained. For polyester that is processed into fibres Lee sees a continued high demand. In the textile industry polyester will continue to be the preferred fibre. Cotton too has its impact “Today 70% of total polyester production is being used in the manu- facture of fibres,” added Francesco Zanchi of.S.I. This fact in turn means that the price of other textile fibres, such as cotton, has an impact on the price of PET. Against this background, and above all with regard to the fact that PET imports into the EU will continue to increase, it is no wonder that movements in the price of, and demand for, PET in Europe can no longer be forecast based on the “sea- sons rule”, which in any case was only valid for the temperate countries in the northern hemisphere. The price of PET in Europe will be increasingly dependent on global factors. In 2009 China and North Eastern Asia’s contribution to worldwide PET production was more than 30%; its own consumption was considerably less than the quantity it produced. In Europe and America consumption is higher than production.