abstract
The physical and chemical characteristics and industrial status of polyester bottle chips: Polyethylene terephthalate, a downstream product of PTA and ethylene glycol, can be divided into fiber grade polyester chips, film grade polyester chips, and bottle grade polyester chips, which will be introduced in this article, according to their downstream applications. Polyester bottle flakes are white granular solids at room temperature. Due to their good plasticity, transparency, and strong barrier properties, polyester bottle flakes are commonly used in beverage and food packaging, as well as in construction, decoration, and other fields.
Production process of polyester bottle flakes: The direct esterification method using terephthalic
ACID (PTA) and ethylene glycol (MEG) as raw materials is currently the mainstream process. The mainstream production of bottle grade PET adopts a two-step synthesis process of polyester process and solid-state polymerization thickening process (CP+SSP). The polyester process (CP stage) uses PTA and MEG as the main raw materials, with additives added during the reaction process. Under the action of a catalyst, the melt generated after esterification and condensation reactions is filtered to produce basic PET chips. Then, through the solid-phase polymerization and thickening process (SSP stage), solid phase continuous polymerization is carried out to produce finished products.
Ø Polyester bottle chip fundamentals: In recent years, China has been the fastest-growing producer of global bottle chip production capacity. Currently, China accounts for over 40% of global production capacity, with significant capacity expansion in 22-23 years. China has become a major exporter of polyester bottle chips, with Southeast Asia and Central Asia being the main export regions, followed by South America and Africa. At present, China's production capacity is clearly clustered, and the concentration has significantly increased in recent years, with the top few major manufacturers accounting for over 80% of the production capacity. In terms of demand, the current main demand still comes from food and beverage packaging, and downstream terminals are gradually increasing industrial concentration.
Ø Polyester bottle chip futures foundation: The overall stability of bottle chips continues the contract of polyester industry chain varieties, which is conducive to industry participation and has strong liquidity. After the launch of polyester bottle chips, the variety of products in the entire industry chain will be more complete, and the convenience of enterprises participating in the futures market for risk management will be higher.
Topic Overview
As an extremely important downstream link of polyester, bottle chips play a crucial role in national life. In addition to the beverage packaging process that we are familiar with, bottle chips have many uses in industry, construction, decoration, printing, and other fields. As another important variety in the polyester industry, bottle flakes will also play an important role in supplementing the futures derivatives market in this important industry sector. As the bottle tablets are about to be launched, this article will analyze and sort out the process flow, global and domestic supply and demand situation of the bottle tablet market.
Basic situation of polyester bottle flakes
2.1. Physical and chemical properties and industrial status of polyester bottle flakes
Polyester bottle chips are a type of polyester chip, chemically named polyethylene terephthalate, which is a downstream product of PTA and ethylene glycol. Polyester chips can be divided into fiber grade polyester chips, film grade polyester chips, and the bottle grade polyester chips that this article will introduce, namely bottle chips, according to their downstream applications. In daily life, bottle grade polyester chips are used in beverage and food packaging, as well as in construction, decoration, and other fields. The quality benchmark for the bottle slice contract this time is "Polyethylene terephthalate (PET)
Resin for national standard bottles of the People's Republic of China". Due to the mature production technology and high degree of standardization of bottle slices, it is relatively easy to inspect and the quality gap is relatively limited.
Bottle grade polyester chips belong to downstream varieties in the polyester industry chain, and unlike short fiber and long filament products that often go to the textile industry for further processing, bottle grade polyester chips are basically in the near end use field.
Polyester bottle flakes are white granular solids at room temperature. Due to their good plasticity, transparency, and strong barrier properties, they are often used to produce bottle packaging containers, such as food and beverage packaging, and even daily necessities such as cosmetics packaging. According to their sub categories, they can be divided into water bottle grade, oil bottle grade, carbonate grade, and hot filling grade.
After the launch of polyester bottle chips, it truly achieved full industry chain support from oil products to PX, then to PTA, and finally to downstream products. Polyester bottle chip enterprises can carry out various risk management operations throughout the entire industry chain through the variety of products, such as ensuring production plans or locking in production profits.
2.2. Production process of polyester bottle flakes
Polyester bottle flakes are formed by polymerizing polyester base slices in a solid state and increasing viscosity. Polyester bottle chips have the advantages of safety, lightweight, and environmental friendliness, so they can maintain the quality of beverages, food, and other products for a long time. At the same time, their recycling value is also extremely high, making them one of the plastic materials with the highest recycling rate in the world.
To produce bottle grade PET, it is necessary to first produce conventional PET with an intrinsic viscosity of 0.66 to 0.68. Then, conventional PET needs to undergo solid-phase thickening under certain conditions to increase viscosity and achieve the viscosity of bottle grade PET. At present, the main processes for producing conventional PET are DMT method and PTA method. DMT method, also known as ester exchange method, uses dimethyl terephthalate (DMT) and ethylene glycol for ester exchange reaction, and then condenses into PET; PTA method, also known as direct esterification method, is a direct esterification method using terephthalic acid (PTA) and ethylene glycol as raw materials. There are two types of solid-phase thickening processes: vacuum solid-phase condensation method and inert gas fluidized bed continuous solid-phase condensation method.
Due to low raw material consumption, safe production, short process, and low engineering investment, the mainstream chemical reaction technology path in the domestic PET industry is direct esterification, which uses high-purity terephthalic acid (PTA) and ethylene glycol to directly esterify and condense into polyester. The current mainstream bottle grade PET production adopts a two-step synthesis process of polyester process and solid-state polymerization thickening process (CP+SSP). The polyester process (CP stage) uses PTA and ethylene glycol as the main raw materials, and under the action of a catalyst, the melt generated after esterification and condensation reactions is filtered to produce basic PET chips. The solid-state polymerization and thickening process (SSP stage) is a continuous solid-state polymerization process, in which PET condensation products with a certain molecular weight undergo condensation polymerization reaction in the solid phase to increase the molecular weight of the slices and improve the intrinsic viscosity. Nitrogen is used to remove by-products such as ethylene glycol and acetaldehyde, ultimately achieving the goals of thickening, dealdehydation, and improving crystallinity, resulting in the final bottle grade PET product.
In terms of cost, as polyester bottle chips are the same as other categories, the raw materials are PTA and ethylene glycol, with a ratio of 0.855 PTA and 0.335 ethylene glycol. In addition, manufacturers will also receive a certain processing fee on this basis, but the specific processing profit varies depending on the size of the manufacturer's equipment production capacity, production time, and fuel costs. Overall, the cost of bottle slices follows the cost of raw materials, and this year, with the increase of production equipment and optimization of equipment technology, the overall cost is also relatively stable, and there may be a continuous downward trend in the later stage.
Basic supply and demand situation of polyester bottle chips
3.1. Global Basic Supply and Demand Situation
In the past decade, bottle flakes have been in a process of capacity expansion. The global bottle flake production capacity has expanded from 30.87 million tons in 2019 to 37.86 million tons in 2023. Among them, the production volume of the devices in 2019 and 2023 was relatively large, with a capacity growth rate of around 15%. And the production has also achieved significant breakthroughs in recent years, with global production remaining above 31.7 million tons by the end of 2023 and overall supply developing rapidly. But in the past few years, due to the overseas epidemic heroes, the expansion of production capacity of many leading enterprises was limited, leading to increased investment in bottle tablet production capacity by local Chinese enterprises.
China is still the world's largest producer of polyester bottle flakes. As of the end of 2023, China's production capacity will account for 41% of the global production capacity, reaching 37.86 million tons. Five years ago, China's production capacity was 30.87 million tons, accounting for 34% of the global production capacity. In recent years, China's production capacity base and growth rate have both ranked first in the world. Outside of China, the largest production capacity is in North America, but the overall development growth rate has been relatively slow in recent years. In addition, Europe, South Asia and Southeast Asia, the Middle East and other regions are also important producers of polyester bottle chips.
In addition, in recent years, due to the emphasis on the bottle tablet field in domestic investment, many manufacturers have formed cooperation and collaboration with foreign upstream and downstream manufacturers. After 2024, domestic facilities will gradually be put into operation abroad. Currently, among the world's major manufacturers, Yisheng, Sanfangxiang, CR, and Wankai are all based in China, with a relatively high proportion of production capacity. The overall concentration of the polyester bottle chip industry has also shown an increasing trend in recent years.
In terms of demand, the current global consumption of polyester bottle chips is still mainly concentrated in food and beverage packaging, with water bottle demand accounting for 35%, carbonated bottle demand accounting for 22%, other packaging and container demand accounting for 26%, and packaging and other demand accounting for 15%. And from the perspective of downstream development, the demand for polyester bottle chips will be more concentrated in the fields of food and daily consumer goods in the future.
3.2. Basic Domestic Supply and Demand Situation
After the large-scale production in 2023, the development of polyester bottle flakes in China has reached a new stage. In 2023, the domestic production reached 4.5 million tons, with a production capacity growth rate of over 30%. With a large amount of production, the profits of polyester bottle flakes have been significantly suppressed since the second half of 2023, and the overall profits have dropped significantly.
In terms of industrial structure, China's polyester bottle chip production capacity, as mentioned above, is concentrated in Yisheng, Sanfangxiang, CR and Wankai, with a high degree of industrial concentration, reaching 83% CR4. In the past few years, the polyester bottle chip industry has been loyal during the spontaneous capacity adjustment stage, and some small-scale producers with low competitiveness have gradually been eliminated. Currently, leading enterprises basically occupy most of the supply market. In addition, there will still be around 6.1 million tons of installed capacity for polyester bottle flakes in China in 2024, and at least 3.1 million tons of capacity increase in 2025 and beyond. The overall pattern of bottle flakes is gradually under pressure of overcapacity.
In addition, in terms of production capacity areas, Yisheng's main facilities are located in the Dalian and Hainan factories, while CR's facilities are located in Zhuhai, Guangdong, Jiangyin and Changzhou, Jiangsu, and Wankai's facilities are located in Chongqing and Zhejiang. Compared to the production pattern of upstream PTA, which is distributed in Zhejiang, Liaoning, Jiangsu, Guangdong and other regions, the production capacity of polyester bottle flakes is significantly more concentrated, with over 50% of the facilities distributed in East China, followed by South China and Northeast China.
After nearly two years of large-scale production cycle in China, supply pressure has become apparent, and enterprises have clearly begun to increase their exports. China's polyester bottle flakes have almost doubled their export volume in the past few years, and the current export volume of bottle flakes is around 4.8 million tons per year. Although there have been fluctuations in exports due to weakened overseas demand and trade protectionism in the past stage, overall, domestic production capacity will continue to choose expanding exports as a channel to increase market digestion. Due to limited expansion of overseas production capacity in the past two years, the world's major new production capacity for bottle flakes is either in China or funded by Chinese companies. Domestic supply and export have become the major trend in the later bottle flake market. In the first half of the year, exports have reached 2.75 million tons, and it is expected that exports will continue to increase by more than 20% throughout the year.
After achieving self-sufficiency, China's exports have reached 30% of its production. However, in terms of segmented export categories, due to the overall demand growth still in the Asia Pacific region, the overall export destinations are still concentrated in Southeast Asia and some Central Asian regions. In recent years, demand in Africa and South America has also increased, while demand in Europe is generally saturated, and import volume has been declining year by year, now at an extremely low level.
In terms of terminal demand, soft drinks and packaging are still the main demand in China. Currently, packaging categories and beverage end users account for more than 98% of domestic demand. In addition, there has been a gradual trend towards concentration among end customers in recent years, such as large food and beverage companies like Nongfu Spring, Wahaha, and Yibao, whose consumption has gradually become the main indicator of the bottle market.
