Development direction of recycled market in 2024

In 2024, the capacity of recycled polyester staple fiber will continue to expand significantly, leading to a more obvious oversupplied situation in the industry. However, the supply tightness of recycled feedstock may be hard to improve, resulting in a challenging situation for recycled polyester staple fiber factories. There is a need for policy intervention to effectively address the demand. Overall, the recycled industry is expected to have weak prospects next year, leading to accelerated market restructuring.

1. The central price of crude oil is unlikely to experience significant breakthroughs compared to this year, while the recycled costs remain relatively strong. The price difference between virgin and recycled fibers may be small and with low processing spread of recycled fibers and some tax audits, some production lines may change owners or be delisted.

2. HC re-PSF new capacities will be released in Guangdong and Fujian, and recycled PSF new capacity and capacity transfer focus in North Jiangsu and Central Jiangsu. Local competition will intensify, posing challenges in raw material procurement and product sales.

3. Integration of resources in the recycled bottle flake industry will continue. With lower capacity expansion, prices of recycled bottle flakes are expected to remain strong and are unlikely to significantly decline compared to 2023. In the recycled chip market, competition is fierce, and some factories are facing significant losses. Downstream demand for bottle flakes is weak as the market undergoes further restructuring.

4. To create price difference, the quality of recycled products will continue to polarize, with factories favoring differentiation, specialization, and customization. High-end recycled fibers are a development direction, and international brands are increasing their use of recycled fibers. The years 2025 and 2030 are important milestones for achieving brand commitments, with 2024 being a crucial phase for concerted efforts by upstream and downstream players to be included in the list of brand suppliers. Factories with raw material layout and the ability to trace the entire recycled industry chain have an advantage.

In addition, the National Development and Reform Commission plans to introduce carbon footprint calculation rules and standards for around 50 key products at the national level by 2025, and around 200 key products by 2030.

5. The new capacity expansion in Southeast Asia for recycled products are nearing completion, while the sustainability of the African market requires attention. India, Iran, Egypt, and Indonesia see concentrated new capacity expansions in 2023 (including some second-hand equipment transfers), with the Indian market expected to continue growing. Overseas supply of recycled PSF will increase, making export competition for regular recycled products more challenging.

6. Product structure adjustments will continue, with an increase in differentiated and high-end products. There will be growth in dope dyed fibers, degradable fibers, ocean fibers, and functional composite fibers. Interconversions between solid re-PSF and HC re-PSF flexible lines and upgrades or downgrades in quality will also occur.

For more detailed information on macro trends, crude oil price trends, virgin polyester, future supply and demand for recycled PET, capacity and production expansion for recycled fibers, development of downstream polyester yarn, specific prospects for each product, and price trends, please refer to the "2024 Recycled Polyester Industry Outlook Report".