Major events of Chinese polyester market in 2023

In the concluding phase of 2023, reflecting on the year reveals an evolving landscape within the polyester industry chain. From an industry-wide standpoint to the experiences of individual enterprises, both have undergone significant developments and transformations. Here, we'll outline some key highlights.

2023 sees robust expansion in PTA and polyester capacity

As the primary growth driver in the global polyester industry, the chain witnessed remarkable expansion: Mainland China's PX capacity entered the "40" million tons mark, with several new facilities such as Shenghong Petrochemical, Guangdong Petrochemical, Daxie Petrochemical, and CNOOC Huizhou Phase II starting operations. Additionally, following the opening of Hengli Petrochemical (Huizhou), Jiatong Energy Phase II, and Yisheng Hainan Phase II PTA units, the total PTA capacity increased by ten million tons. Polyester capacity expansion also approached ten million tons, with a notable surge in bottle-grade PET chip, achieving a growth rate of 35%.

Double-digit growth across polyester industry in 2023

Despite facing challenges in the foreign trade market in 2023, the domestic demand resurgence significantly strengthened the overall polyester market, resulting in robust production and sales. The preliminary data indicates a polyester production growth rate exceeding 15% in 2023, the highest level since 2012. The unexpected surge in polyester production supported the entire industry chain's rapid expansion.

China launched PX futures and options, and hedging tools in polyester chain further optimized.

On Sep 15 2023, China launched PX futures and options on Zhengzhou Commodity Exchange. Therefore, PX, PTA, MEG and PSF futures can offer more hedging tools.

New changes in the layout of polyester industry: the first direct-spun PFY unit in Xinjiang was put into production; the PSF plant of Fuwei'er was settled in Zhuhai

On March 19, 2023, Xinjiang Yuxin New Materials Co., Ltd. successfully started the first set of polyester chemical fiber project polyester spinning unit phase I with 300kt/year of capacity, which marked a zero breakthrough in the field of polyester direct spinning filament in Xinjiang. With the commissioning of the new plant in Zhongtai, direct-spun PSF will also be laid in Xinjiang.

In October, the 100kt/year low melting point PSF project of Fuwei'er (Zhuhai) Composite Material Co., Ltd. started production successfully and has also become a new bright spot in the field of direct-spun PSF in Guangdong Province in recent years.

Tongkun is upgraded to a 10-million-ton PFY giant and completes the industrial integration of MEG plate

Tongkun witnesses the intensive launch of PFY capacity in 2023. Within 2023, 3 million tons of direct-spun PFY projects have been completed and put into production in Suqian, Nantong, Jiaxing, Alar and other places. As a result, the PFY capacity of Tongkun has reached 10 million tons/year, ranking first worldwide. In addition, with the successful commissioning of Xinjiang Zhongkun's 600kt/year of syngas-based MEG project in November, Tongkun Group has also completed the integration of the MEG unit, and the industrial chain system has been further improved.

Tongkun & Xinfengming jointly invested refining-petrochemical projects in Indonesia

On the night of Jun 26 2023, the two leading enterprises in the polyester industry, Tongkun and Xinfengming joints announced to initiate Taikun Petrochemical (Indonesia) Co., Ltd. Refining-petrochemical Integration Project in Kalimantan Utara, Indonesia, which would have oil refining capacity of 16 million mt/yr, PX capacity of 5.2 million mt/yr and ethylene capacity of 800kt/yr. The construct is expected to last for 4 years, according to the official announcement.

Aramco purchased 10% interest in Rongsheng & Aramco and Eastern Shenghong signed cooperation framework agreement

Saudi Aramco has successfully closed a landmark transaction to acquire a 10% interest in Rongsheng Petrochemical Co. Ltd. ("Rongsheng") for RMB 24.6 billion ($3.4 billion). The acquisition follows the signing of definitive strategic agreements by both parties announced on March 27, 2023. Aramco will supply 480,000 barrels per day of Arabian crude to the largest Chinese integrated refining and chemicals complex, which is owned by Rongsheng affiliate Zhejiang Petroleum and Chemical Co. Ltd (ZPC).

Aramco and Jiangsu Eastern Shenghong Co., Ltd. ("Eastern Shenghong") signed on Sep 27 a cooperation framework agreement to facilitate discussions relating to the possible acquisition by Aramco of a 10% strategic equity interest in Jiangsu Shenghong Petrochemical Industry Group Co., Ltd. ("Shenghong Petrochemical"), a wholly-owned subsidiary of Eastern Shenghong, subject to due diligence and required regulatory clearances.

Hengli's Huizhou Industrial Park Commences Operations, Expanding PTA Industry Layout in the Greater Bay Area

On March 18, 2023, Hengli's Huizhou Industrial Park successfully initiated its first PTA production line and produced qualified products the following day. Then, on July 11, the second PTA production line began operations, marking the comprehensive production launch of 5-million-ton-per-year PTA project.

Hengli's Huizhou Industrial Park stands as the inaugural project for Hengli Group's strategy in developing the Guangdong-Hong Kong-Macao Greater Bay Area and serves as a major production base beyond Hengli's Dalian Changxing Island Industrial Park. The Huizhou PTA project can process and convert PX from the Daya Bay Petrochemical Park into raw materials required for the new materials industry, effectively reducing production costs and enhancing product competitiveness in the market. This initiative contributes to bolstering the shortcomings in the middle and lower reaches of the Huizhou and even the Guangdong petrochemical industry chain.

Trends of other polyester industry chain related enterprises

The second line of original Chengold started up: in August 2023, after a year and a half of asset reorganization, Chengold's second production line with an annual output of 600000 tons of PET bottle chip was put into production. The successful commissioning of this production line marked that the total PET bottle chip capacity of China Resources reached 3.3 million tons per year.

Fujian Billion domestic PET bottle chip project came up: in August 2023, Fujian Billion's 700000 tons PET bottle chip line was successfully put into production, and its overseas bottle chip capacity is also gradually expanding, forming a domestic and overseas two-way development of the industrial layout.

Hengli Petrochemical (Dalian) new projects launched: from October to November 2023, Hengli Dalian's two sets of PET bottle chip projects have been put into production, marking its 1.6 million tons/year high-performance resin and new materials project production progress.

Yipu New Materials is a new players in PET bottle chip industry: in December 2023, Xinjiang Yipu, a new polyester plant with an annual output of 120000 tons, was gradually put into operation, producing bright chip in the early stage and PET bottle chips in the later stage. Yipu New Materials Co., Ltd. is located in Karamay, Xinjiang, funded by Yangzhou Polytex (70%) and Karamay Guangsheng Industrial Investment Co., Ltd (30%).

The capacity of Yongsheng Technology Film has been expanded to 430000 tons: in December 2023, the fourth German Dornir high-speed width drawing line was successfully put into production, indicating that Yongsheng Technology's 250000 tons of functional polyester film expansion project has all been successfully put into production.

So far, the company's annual capacity of polyester film has reached 430000 tons, ranking among the top four in China.