MARKET NEWS

Plastic Restriction Policies Will Drive the Demand for PETG

PETG, glycol-modified polyethylene terephthalate, is a copolyester that is a clear amorphous thermoplastic. It has good viscosity, transparency, color, chemical resistance, and resistance to stress whitening. It can be thermoformed or extrusion blow molded very quickly.

Blow molding is a manufacturing process for forming and joining together hollow plastic parts. It is also used for forming glass bottles or other hollow shapes. Blow Molding Grade ETG can be used as thick walled containers, such as beverage bottles, cosmetic bottles, cleaning Utensils, medical products, etc. Injection molding is a process of producing parts made of thermoplastic or thermosetting plastics. Injection molding grade PETG can be used in architectural decoration, medical facilities and medical tools. Extruded grade PETG can be used to produce sheets, films, storage racks, furniture, tubes etc.

PETG can be made into the shape of sheet with outstanding toughness and high impact strength. It is widely used in indoor and outdoor signs, storage racks, vending machine panels, furniture, construction and mechanical baffles, etc. PETG sheet can also be applied to credit cards, ID cards, etc. PETG can be made into a film shape and is mainly used for highperformance shrink film. Since PETG has a high final shrinkage rate, it can be made into packaging for complex-shaped containers. PETG can be made into the shape of bottle or container, because copolyester PETG is easy to process, and has the same transparency as glass and a density close to the glass. Because PETG is easy to process, it can also be made into an extruded profile. The clarity of PETG extrusions makes them ideal for use in point of sale displays, ticket strips, shelving systems and card or menu holders. Clear PETG extrusions also find their way into components for blinds, corner guards, office partitioning and lighting tubes. More specialist uses of extruded PETG include electronics component carrier tubes, medical devices and medical or sampling tubes.

The COVID-19 Brought the Decrease of Oil Price, Reducing the Cost of PETG Raw Material and Increasing the Demand and Profit

The COVID19 pandemic has caused people to panic hoard all kinds of supplies, especially alcohol and hand sanitizer which have disinfecting effects. Due to the excellent physical and chemical properties, PETG plays an important role as a key chemical compound used to make sterile, single use disposable containers for cosmetics and disinfectants. The market demand for PETG products has risen sharply. In addition, the raw material cost of PETG is falling. The economic impact of the coronavirus has hit the oil and gas industry. Since January 2020, oil prices have plummeted. Although the Organization of Petroleum Exporting Countries (OPEC) and its allies (OPEC+) have reduced oil supply, and governments have made efforts to stimulate the global economy and oil demand, the world is still flooded. With crude oil and fuel. As a result, refiners reduced fuel production, causing oil-producing countries such as Saudi Arabia to cut prices to offset the decline in crude oil demand. As the upstream raw material of PETG, the drop in oil prices will reduce the production cost of PETG, thereby increasing the profitability of PETG industry participants. In the short term, we predict that the market demand for PETG will rise sharply and the growth rate will accelerate. In the long run, PETG will have steady growth. After the COVID19 epidemic in various countries or regions is alleviated, demand for hand sanitizer and other disinfection products will decline. However, the routinization of COVID-19, increasing  awareness of hygiene will lead to stable demand for PETG in the market. In addition, the measures to restrict the use of plastics will limit the application of PETG alternatives. The United Nations Conference on Trade and Development (UNCTAD) released a report stating that COVID-19 has increased the pollution of disposable products such as plastic masks and hand sanitizer bottles worldwide. It is recommended to implement effective Trade rules and policies will limit the spread of waste pollution in the future. The future development of the non-degradable plastic industry may be restricted. Asia Pacific was the largest revenue market with a market share of 39.27% in 2015 and 41.49% in 2020 with an increase of 2.22%. North America ranked the second market with the market share of 29.22% in 2019.

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Plastic Restriction Policies Will Drive the Demand for PETG, and Enterprises Must Breakthrough the Technical Restrictions and Form Integrated Production

The impact of plastic products on environmental pollution has attracted increasing attention. In recent decades, the global production of plastic products has multiplied, and its growth rate has not weakened at all. The increasing pressure of non-governmental organizations and public opinion has forced the plastics industry to begin to examine the development prospects of the sector. Countries and regions such as Europe, the United States, and Japan have successively formulated and promulgated relevant laws and regulations to restrict the use of non-degradable plastics through measures such as partial prohibition, restriction, mandatory collection, and collection of pollution taxes to protect the environment and soil. The Ministry of Environment of South Korea confirmed that large supermarkets in South Korea will completely ban the use of disposable plastic bags from 2019 to further reduce white pollution. Starting in 2021, the EU will completely ban all disposable plastic products that can be made of cardboard and other alternative materials. The production of recycled plastics is gradually emerging. PETG has the properties of easy processing, recyclability and environmental protection, no harmful substances are generated after combustion, and it meets the requirements of food contact management. Driven by the promulgation of plastic restriction and plastic ban laws in the European Union, South Korea, Australia and other regions, the global demand for PETG will continue to grow. The recovery of the macroeconomy and the rise of disposable income will cause consumers to refocus on cosmetics and personal care products or new technologies such as 3D printing. This is also one of the driving factors for the development of the PETG industry.

CHDM, one of modified monomer raw materials of PETG, is expensive. The main reason is that CHDM synthesis is difficult and high technical barriers have led to fewer participants in the CHDM market. When the supply cost of CHDM is high and the number of suppliers is small, and the number of competitors on the demand side is large, if PETG manufacturers do not break through technical barriers to form backward integration, then raw material costs and prices will be unstable, which will limit the strategic development of the enterprise. If the PETG raw material autonomy is insufficient, all the required raw materials come from external procurement, and the raw material procurement prices will also have a certain degree of uncertainty, so the fluctuation of procurement costs will affect the profitability. In contrast, the integrated production group can achieve control of upstream raw materials and have more stable operating capabilities.

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