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Insight | Time:Sep 29 2017 3:18PM
New round of polyester capacity expansion coming
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After reshaped in 2012-2015, polyester industry steps 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.

Table 1. Polyester capacity into production in 2017
Company Capacity (kt/yr) Time Product Remark
Wankai 500 Mar Bottle chip  
Hengbang phase II 250 Apr PFY  
Yipeng 200 May PFY Old plant
Yijing phase I 250 May PFY Old plant
Yisheng Hainan 250 Jun Bottle chip Old plant
Hengbang phase II 250 Aug PFY  
Yifeng 250 Sep PFY Old plant
Yijing phase II 500 Sep PFY  
Yisheng Hainan 250 Sep Bottle chip Old plant
Hengyi (Linjiang High-tech Zone) 90 Oct Fiber chip  
Hengyi (Linjiang High-tech Zone) 500 Oct PFY Old plant
Jiangyin Chengxing 600 Oct Bottle chip  
Siyang Haixin 250 Dec PFY  
Shenghong 60 Dec Fiber chip  
Total 4200      

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

Chart 1. Quarterly net profits of Tongkun Group

Good profits quicken the startups of new plants including those postponing operation previously. Around 4.8 million tons/yr 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, polymerization plants planned to start up in 2019 will contribute a capacity of around 4.5 million tons/yr. Most of them signed contract but have not conducted construction yet. Therefore, exact time to start up is uncertain.

Chart 2. Polyester capacity into production in 2018

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.

Chart 3. Market shares of megaton producers

Market shares of megaton polymerization companies expand quickly from 12% in 2005, 47% in 2015 and 65% in 2019. There will be 15 megaton polymerization companies in 2019, including 7 with capacity over two million tons/yr, accounting for 47% of total capacity. Their market shares will expand further, especially those with capacity of over two million tons/yr after 2019.

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