On March 19, at the S&P Global World Petrochemical Conference (WPC) held in Houston, industry experts issued a warning: currently, China's dominant position in the global polyethylene terephthalate (PET) market is becoming increasingly solid, while the European PET industry, which heavily relies on exports for revenue, is facing unprecedented risks. Data shows that the volume of PET imported by Europe from China has already shown a downward trend.
Michael McDermott, the polymer director of S&P Global Commodity Insights, pointed out that although the demand for locally produced bottled products in Europe is steadily growing at an annual rate of about 2.2%, which translates to one PET bottle consumed every two days per person, the European PET industry still overly focuses on export business.
Regarding the future direction, McDermott stated that the successful promotion of recycled PET (rPET) in the market depends on the demand trend for virgin PET. He further explained: "The demand trend for virgin PET directly determines the effectiveness of rPET promotion." In his view, the expansion of PET application fields is crucial; it should not be limited to just bottled products. Industries such as construction and fibers should become new market growth points for PET.
McDermott also predicts that by 2030, Europe is expected to become the world's first region where rPET usage exceeds virgin PET. However, since 2023, two large virgin PET production enterprises in Europe have successively shut down, making the local PET supply situation in Europe unpredictable.
At the same time, McDermott also frankly stated that the current European PET industry is facing many thorny problems, with insufficient investment in recycling infrastructure and brand companies finding it difficult to fulfill their commitments to using recycled materials being particularly prominent. Given the continuous rise in market demand, Europe is very likely to become more dependent on importing PET products from Asia. After all, the Asian region, with its lower labor costs, has a significant price advantage in PET production. In response, McDermott frankly said: "From a business perspective, importing PET not only offers greater profit margins but also effectively ensures the stability of business operations."
Asia becomes the main engine of global PET demand growth
From a global perspective, the PET market landscape is undergoing profound changes. Thanks to the strong competitiveness of local production capacity, it is expected that Asia will contribute 56% of the global PET demand growth over the next decade. In China alone, between 2018 and 2026, the new virgin PET capacity will reach as high as 11.8 million tons. Such a large-scale expansion in capacity also raises concerns among industry insiders that the global PET market may fall into a serious oversupply dilemma in the short term.
In line with McDermott's perspective, Tatiana Bondar, Vice President of Commodity Insights for Fibers, and Dai Shanshan, Director of Fibers, both emphasized the importance of strengthening local supply chains, calling for the European PET industry to reduce its reliance on imports. However, it is important not to overlook that there are still some long-term risks in the PET market demand.
The experts at the meeting particularly pointed out that with the growing environmental awareness of consumers, more and more people are beginning to choose reusable water bottles. This shift in consumption habits is very likely to impact the market demand for single-use PET packaging, casting a shadow over the future development of the entire PET industry.
In addition, the meeting also focused on the profound impact of policies and regulations on the development of the PET industry. Taking the American region as an example, there are significant differences in PET industry regulatory policies among different countries and regions. This inequality in regulation also brings many challenges to the overall planning and forecasting of the industry.
