China's PET Resin Exports May Get Some Boost as Overseas Plants Shut Down
- 26-Oct-2023 3:50 PM
- Journalist: Xiang Hong
Recently, there has been a slowdown in the processing of Polyethylene Terephthalate (PET) Resin, which has led to the closure of several PET Resin production facilities worldwide. In the European market, there has been disagreement within the European Commission about imposing additional charges on PET Resin chip products made in China, which might be sold at unfairly low prices in Europe. Initially, the commission was supposed to announce its decision by the end of October. However, it has been reported that they will delay the decision by one month, pushing it to the end of November.
In March 2023, the European Commission investigated whether China was selling PET Resin at unfairly low prices in the EU, responding to a request from the European industry group PET Resin Europe. China's customs data revealed that they exported less than 400,000 tons of PET Resin to the EU last year, constituting about 8.7% of China's total exports. Since the start of the year, the EU has increased import tariffs on Indian goods and initiated an anti-dumping investigation on Chinese products. This forced EU businesses to seek suppliers from countries such as South Korea, Vietnam, and Turkey while favoring local sourcing to meet their production needs.
This was due to the increased energy, labor, and raw materials costs, which have risen significantly from the start of the year. This has caused PET Resin chip factories in the EU to operate at reduced capacity for a long time, and they haven't been able to return to normal production levels. This has resulted in a strong demand for imported products. One of the biggest PET Resin chip suppliers in the EU, JBF, announced that it would stop its operations by the end of October. One of its units had already been shut down in September. It's reported that JBF is thinking about starting a financial restructuring process due to high expenses; they are losing money on their PET Resin chip products, forcing them to consider shutting down.
Meanwhile, with DAK's exit, a big PET Resin chip project in the United States aimed to produce 1.1 million tons might be delayed and not make much progress soon. This means that customers in the US may start buying more from Asian suppliers.
As a result, it's predicted that China's exports of PET Resin will start to increase again by 2024. This is because there will be more demand from other countries, and the supply from the United States is expected to decrease. So, Chinese companies have a chance to sell more of their products in the global market. This change in the market might benefit Chinese businesses.