First signs of shake-out in Chinese polyester capacity?
Demand for polyester is not as strong as expected
Polyester projects that are already planned, financed and committed are continuing to drive an increase polyester fibre capacity in China - but first signs suggest growth is also starting to slow down.
The shake-out is due to demand growth not being as strong as expected by the polyester industry in China and elsewhere in Asia, according to consultancy firm PCI Fibres.
Based on the latest edition of its PCI Fibres Red Book, there are 15 Chinese firms listed in the world's top 20 polyester fibre producers.
But among these there are three producers - Kings Industry Group, Jiabao and ShiChuan - all of which produce textile filament and are based in Zhejiang, that have already reduced capacity this year. And Shaoxing Yuandong of Zhejiang in textile filament and staple has stopped expanding.
Expansion also appears to have come to a halt at the following operations in Jiangsu, the first in staple and the other three in textile filament: Jiangyin Huahong, Taicang Senjo, Yixing Huaya and Wujiang Yingxiang.
Reports from the market suggest there are a number of other companies undertaking reductions in capacity, mostly without any announcement to the market. Fibre producers in expansion mode are usually quite keen to publicise any new capacity, but the reverse applies when capacity is being cut back.
Still expanding, however, is Tongkun, China's top producer, as are two other leaders in the list: Reliance Industries in India and Indorama Ventures, which is now spread across South East Asia, India, Europe and North America, partly with new capacity and partly through acquisition.
Toray Industries has also expanded through acquisition, with the purchase of Woongjin in Korea, and as a result returns to the top 20 list.
India's Reliance Polymers has launched what it claims is one of the world's greenest, sustainable fibres, manufactured from post-consumer waste PET bottles....
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