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Polyester
Fibers
*Millions
of pounds per year of polyester fibers: textile filament yarn, industrial
monofilament fibers, staple, tow and fiberfill. Polyester fibers are produced by
melt spinning of polyethylene terephthalate (PET). The PET polymer is derived
from ethylene glycol and either dimethyl terephthalate (DMT) or purified
terephthalic acid (PTA). Cedar
Creek Fibers, Fayatteville, N.C. was formerly owned by Wellman Fibers. This
location was spun-off in mid 2002. DAK
Americas derives from the DuPont-Akra Polyester joint venture created between
DuPont and Akra (A division of ALFA) in April of 1999. The company became wholly
owned by Alpek in 2001, the petrochemical group of ALFA. KoSa
B.V. was established as a 50:50 joint venture between Koch Industries and IMASAB
(Mexico). In early 2002 Koch acquired 100 percent of the company. Last November
DuPont contracted with Koch Industries to sell its Invista textile fibers
business. Two months earlier, DuPont repackaged its DuPont Textiles &
Interiors business as Invista in anticipation of such a sale. After the deal is
consummated, a new resin and fiber company is expected to emerge by combining
KoSa with Invista. Nan
Ya Plastics is a subsidiary of Formosa Plastics (Taiwan). Universal
Fiber Systems, Asheboro, N.C., was established in 2000 with a management buyout
from Cookson Fibers. New
profile, 3/8/04. DEMAND 2001:
3,980 million pounds; 2002: 4,150 million pounds; 2006: 4,300 million pounds,
projected. Demand equals production plus imports (2001: 1270 million pounds;
2002: 1,455 million pounds) less exports (2001: 265 million pounds; 2002: 315
million pounds). GROWTH Historical
(1997 - 2002): -2 (minus) percent per year; future: 0.5 percent per year through
2006. PRICE Historical
(1997 - 2002): High, $0.70 per pound, filament yarn; low, $0.45, same basis.
Current: $0.75, same basis. USES Apparel, 27 percent; industrial (tire cord, transportation upholstery, seat belts, hoses, conveyor belts, rope), 24 percent; fiber fill, 15 percent; home textiles (bed sheets, curtains), 13 percent; carpets and rugs, 11 percent; nonwoven fabrics (for industrial, apparel and home textile uses), 10 percent. STRENGTH Global
demand for polyester fibers should run about 5 percent per year for the
foreseeable future. In the US, however, long-term demand will remain flat due to
increasing Asian supplied textiles. Short term, 2004 and a bit beyond, modest
gains in demand will be experienced. Inventories are lean and as the economy
picks up polyester demand should follow as a result of stronger retail sales and
increased textile demand. Carpets and rugs should continue to do particularly
well. This segment grew at 6 percent annually between 1997 and 2002 while other
sectors declined. WEAKNESS 2003
was not a good year for polyester. When the numbers are in, demand will probably
be down 2 to 4 percent over the previous year – a year that was a turnaround
for polyester. The market has been weak because of the steady growth of imported
garments from Asia, especially China. The polyester sectors hardest hit have
been apparel and home textiles. Their annual declines over the past 5 years
(1997-2002) were -11.3 and Polyester’s
supply side has been squeezed for more than a year with rising energy and
feedstock costs for PET. Production costs for PET have risen 20 to 30 percent
because of the price of oil. In addition, the supply of ethylene glycol and
paraxylene, two precursors to PET have been extremely tight and will remain so
as there is no new capacity in the pipeline for either. Paraxylene and ethylene
glycol are nearing the end of their commodity cycles and new capacity will
arrive, perhaps in late 2005, softening raw material costs for PET producers. OUTLOOK Polyester
is a mature no-growth to low-growth commodity chemical. It is being squeezed on
the supply side by high cost raw materials and constraints with its
intermediates’ capacities, and pressure on the demand side by competition from
imported textile goods. The improving US economy should halt the trend of
decline in demand, but the future demand curve promises to be flat. Forecasted
demand growth is 0.5 percent annually through 2006. HISTORICAL DATA
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