The global market is expected to grow at a CAGR of 6–8 percent during 2018–2025: The impetus for this growth comes from an increasing demand in Asia, due to increased FMCG demand
Demand from the beverage industry:The growing demand for plastics across the globe is the key factor driving the market. The beverage industry is shifting towards PET bottling from the glass bottling industry
The paraxylene market has observed significant improvement in PX to naphtha spreads during the start of the year 2021. Demand is expected to be healthy from PET sector going forward. Supply is likely to balanced due to upcoming plant shutdowns.
Food and beverage production is expected to grow amid vaccine distribution and relaxed movement restrictions
About ~3.3 MT/year PTA facility in China is expected to start-up by Q3 2021, which will provide new demand for PX
Weak downstream polyester demand within China, coupled with run rate reduction at polyester facilities had resulted in fundamentals in the PTA markets to be weaker
Major drivers are demand from downstream sector and upstream prices, while major constraints shift to lighter feedstock, due to shale gas revolution in the US.
Feedstock: Feedstock is one of the major drivers for PX and PTA. PTA had a correlation of approx. 0.89–0.99 with PX. PX had a correlation of approx. 0.80–0.85 with Naphtha
Downstream demand from PET: PET is most prominently used in fibers (fiber grade) and the bottling industry (bottle grade). In 2016–2017, the growth rates for fibres have witnessed lower rates of <2 percent CAGR as compared to the bottling demand, which witnessed a higher rate of 6–7 percent CAGR, however, bottling demand is not consistent throughout the year and the demand surges only in summer
Crude and Naphtha prices: The price extremities of crude, over the years, have contributed profoundly to the overall pricing of the commodity. Naphtha prices are highly correlated with the prices of PX
Regulations: Increasing blending of ethanol in gasoline, which has a better octane rating than aromatics, has greatly reduced the use of aromatics component as octane boosters
Shift to lighter feed slate: Due to the shale revolution in the US, many cracker units have switched to cheaper ethane as feedstock rather than conventional naphtha, which has reduced the production of aromatics
IMO Regulation:The biggest change in the US might be the requirement for gasoline sulphur to be reduced to meet the Environmental protection agency’s (EPA’s) The change in gasoline sulphur requirement might lead to more octane being diverted into the gasoline blending pool, overall reducing aromatics production
Uncertain Project Timelines: Several capacitates are coming online, uncertainty of these project, particularly in the US are creating glitches in regional supply forecasts that would require to meet demand levels in import dependent regions
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