Forecast calls for strong demand, intensifying competition
By Staff -- Purchasing, 5/4/2000 2:00:00 AM
The market for polyethylene terephthalate (PET) is robust. Prices have been on the rise, increasing about 10¢/lb for bottle-grade material in the past year, from about 46¢/lb to about 56¢/lb currently, according to Purchasing data from resin buyers.
Demand has also been strong. Industrial market analysis firm, The Freedonia Group of Cleveland, Ohio, forecasts that total PET resin demand will increase at a rate of more than 6% pear year to 6.6 billion lb in 2003. At that time, the PET market is expected to total $4.1 billion.
According to the Freedonia study, demand gains during this period will be driven by packaging applications, especially single-serve beverage bottles. Demand for PET in packaging applications is expected to increase at a 7% annual clip through 2003.
Packaging accounts for more than 85% of PET resin demand. Other uses include audio-visual media, such as in the manufacture of magnetic tape, injection-molded motor vehicle components, and electrical and electronic components. Combined, these other uses make up less than 15% of the market for PET. Minimal growth is expected for PET use in magnetic tape applications, due to an influx of new technologies, such as digital photography, compact disc, and digital versatile discs (DVD).
New competition
But while analysts are forecasting strong PET growth through 2003, the market may begin to see increasing competition from a new, biodegradable plastic polymer made from sustainable corn resources. The new polymer, polylactide (PLA) has properties similar to PET, and is currently being developed by Cargill Dow Polymers, a joint venture of Cargill Inc., Minnetonka, Minn., and Dow Chemical Co., Midland, Mich. PLA is slated for use in packaging, bottling and textile applications.
Dow and Cargill have been separately developing plastics made from organic resources for more than 10 years, but the companies have focused in the past five years more on the sustainability of material resources than the biodegradability of PLA.
"It's great that PLA is biodegradable, but it has to compete with PET and other traditional plastics on its own merits in terms of cost and performance," says John Ohman, marketing director of Cargill Dow Polymers. "You need both features or you're looking at a niche product."
For the next two years, both Cargill and Dow have committed $300 million to manufacture and continue research on PLA. The investment includes construction of a 300 million lb/yr facility in Blair, Neb. Company sources expect the plant to be online and producing PLA by the end of next year.
In other news, PPG Industries, Pittsburgh, Pa., and a consortium of packaging manufacturers recently developed and tested new PET bottle coating and compositions with plastics recyclers. The PET coating product, Bairocade, is applied to the exterior of PET bottles and designed to extend the shelf life and freshness of consumer foods and beverages.
PPG tested the feasibility of recycling PET bottles into fiber, strapping, sheet and single-layer PET food and beverage containers, and found recycling possible by removing the coating during the grind-and-wash phase of PET recycling, according to the company.
Eastman shuts PET plant for repairs
02/09/2010Metals Chips
02/09/2010Keep an eye on new "natural plastic," result
02/09/2000CORPORATE CHANGES
01/14/1998
Now Playing: 
