PBT: Slack Demand & Bottom-line Losses

By Song Binbin, Jilin Design Institute of CNPC Northeast Refining & Chemical Engineering Company Limited

Capacity in surplus

China’s polybutylene terephthalate (PBT) capacity was 220 kt/a in 2010 and the output was 172 kt. By 2015, they had increased to 955 kt/a and 460 kt, respectively. The average annual growth during 2010-2015 was 34.1% for capacity and 21.7% for output. Table 1 shows the major PBT producers in China in 2015.
PBT units in China have been kept very busy in recent years, and the capacity is already in serious surplus. Units that had been planned for construction, such as a 100 kt/a unit of Xinjiang Blue Ridge Tunhe Polyester Co., Ltd. and an 80 kt/a unit as the second-phase project of Wuxi Xingsheng New Material Co., Ltd. will likely be postponed indefinitely. Capacity is expected to remain at 955 kt/a in 2020, while output will be 613 kt, after average annual output growth of 5.9% during 2015-2020.


Table 1    Major PBT producers in China, 2015

Producer    Capacity (kt/a)    Location
Chang Chun Chemical Co., Ltd.    200    Changshu, Jiangsu
Jiangsu Heshili New Material Co., Ltd.    120    Jiangyin, Jiangsu
Kanghui Petrochemical Co., Ltd.    100    Yingkou, Liaojing
Henan Kaiyang Chemical Co., Ltd.    100    Yima, Henan
Yizheng Chemical Fiber Co., Ltd.    80    Yizheng, Jiangsu
Wuxi Xingsheng New Material Technology Co., Ltd.    80    Wuxi, Jiangsu
Nantong Xingchen Synthetic Material Co., Ltd.    60    Nantong, Jiangsu
Xinjiang Blue Ridge Tunhe Polyester Co., Ltd.    60    Changji, Xinjiang
Fujian Meizhouwan Chlor-Alkali Industry Co., Ltd.    60    Quanzhou, Fujian
Shandong Weijiao Holdings Group Co., Ltd.    60    Weifang, Shandong
Jiangyin Jihua New Material Co., Ltd.    35    Jiangyin, Jiangsu
Total    955    

Table 2    China’s foreign trade in PBT, 2010-2015

Year    Import    Export
    Volume (kt)    Value (US$ million)    Volume (kt)    Value (US$ million)
2010    163    459.87    82    189.06?
2011    154    494.59    93    256.77?
2012    141    485.20    87    226.12?
2013    144    492.44    100    249.28?
2014    141    493.11    175    380.22?
2015    128    424.90    182    337.11?


Import and export

The supply of PBT in China has increased drastically in recent years. While a few high-end varieties still must be imported, the export volume of general-purpose products is much higher than before.
The import volume of PBT fell steadily during 2010-2015. It dropped from 163 kt in 2010 to 128 kt in 2015, with an average annual decrease of 5.0%. The export volume was 82 kt in 2010 and 182 kt in 2015. The average annual growth of the export volume was 17.3% during 2010-2015.
The biggest source for the import of PBT to China in 2015 was Taiwan and the volume imported was 43 kt, accounting for around 33.6% of the total. Second was Malaysia, sending 22 kt, 17% of the total. Third was Japan, sending 19 kt, or 14.9%. The biggest destination for China’s exported PBT in 2015 was Korea, taking 45 kt, around 24.7% of the total. Second was Hong Kong, taking 20 kt, or 11.2% of the total. Table 2 shows China’s import and export of PBT during 2010-2015.

Prices coming down

PBT prices in China are influenced mainly by the prices and market supply/demand for PBT’s raw materials PTA and BDO. The price of PBT was quite high and stable during 2011-2014, fluctuating at RMB23 000-26 000/t. With the drastic price drop of crude oil in the international market, the price of PBT fell to around RMB21 000/t at the end of 2014, but has been stable since then. It is expected to hover around RMB20 000/t in the next few years. Figure 1 shows the price trend of PBT in China during 2011-2016.

Forecast for slow demand growth

The apparent consumption of PBT in China was 253 kt in 2010 and 406 kt in 2015. The average annual growth of consumption was 9.9% during 2010-2015. In 2015, the manufacture of modified engineering plastics accounted for 57% of all PBT consumption in China, while 25% was used to make optical cable materials, 10% for yarn spinning and 8% for other purposes. The apparent consumption of PBT in China is forecast to reach 516 kt in 2020, after average annual growth of 4.9% during 2015-2020.
In downstream sectors in 2015, due to the national economic picture, demand for PBT in making modified engineering plastics shrank, while demand in yarn spinning increased. Since the second half of 2015, the emergence of imitation wool and imitation rabbit hair core-spun yarns, in particular, has driven up PBT demand.
With slower economic growth, the demand for PBT in making modified engineering plastics is expected to be uneventful, with slow growth. As China makes few varieties of optical cable materials, which are mainly used in making buffer-tubes for optical fiber cables, the related demand for PBT will be quite flat. Due to rapid market changes for yarn spinning, the demand for PBT there will not increase much either.