Fires and Forces Majeures in 2018 reduced available fiber and rawsAlpek Mexico – down for 6+ weeks after fire in structural areaEquipment issues and hurricanes plagued PSF
13
14
15
4/26/2019
6
Polyester Supply Chain ‐ Investments
Huvis Indorama JV (low melt) - Spartanburg 60 kt
Far Eastern purchase of M&G’s Apple Grove resin plant - $34M JV of Indorama, Alpek, and Far Eastern purchase of Corpus Christi @ $1.1B
FTC approved JV purchase on 12/24/2018 – Happy Holidays! Estimated startup 2020 for resin, PTA to be 18 months after
Fiber Industries restart of Wellman plant (staple) Parkdale / Intrinsic Textiles JV to develop CiCLO (biodegradable) technology Unifi / Polartec recent announcement to use CiCLO in fleece production Indorama/Loop Industries JV to begin US production of 100% sustainably
produced resin and fiber in Q1 2020 Indorama and DAK just bought rPET plants
US Polyester Supply Chain – Antidumping and Countervailing
PET Resin• ADD + CVD• Filed 3/2015: • Canada, China, India,
Oman• ADD (Filed 9/2017) Brazil,
Indonesia, Korea, Pakistan and Taiwan
• 5 - 276%• Dismissed (10/2018) on
Brazil, India, Korea, Pakistan, Taiwan
20
30
40
50
60
Jul‐16
Jan‐16
c/lb
Jan‐18
Jan‐17
Jan‐19
Jul‐17
Jul‐18
PET Resin to Formula Price Difference
Source: Wood Mackenzie Chemicals
US Polyester Supply Chain – Antidumping and CountervailingPET Resin• ADD + CVD• Filed 3/2015: • Canada, China, India,
Oman• ADD (Filed 9/2017)
Brazil, Indonesia, Korea, Pakistan and Taiwan
• 5 - 276%• Dismissed (10/2018) on
Brazil, India, Korea, Pakistan, Taiwan
Low Melt Fibers• ADD • Filed 6/2017: • Korea and Taiwan • 0 - 52% • Spared: Huvis - Korea
Fine Denier Staple• ADD + CVD• Filed 5/2017:• China, India, Korea,
Taiwan, • 0 – 220% • Spared: Toray -
Korea and Tainan Spinning –Taiwan
20
30
40
50
60
Jan‐16
Jul‐16
c/lb
Jan‐17
Jan‐19
Jul‐17
Jul‐18
Jan‐18
30
32
34
36
38
40
Jul‐18
Jan‐17
c/lb
Jan‐18
Jul‐16
Jan‐16
Jul‐17
1.2d Staple to Formula Price Difference
10
15
20
25
30
35
40
Jul‐18
c/lb
Jan‐16
Jul‐16
Jan‐17
Jul‐17
Jan‐18
Low Melt to Formula Price Difference
DTY Filament• ADD + CVD• Filed 10/2018:
China, India• Beginning stages
of investigation50
55
60
65
70
Jan‐16
c/lb
Jan‐18
Jul‐17
Jan‐17
Jul‐16
Jul‐18
150d DTY to Formula Price Difference
150d DTY to Formula Price Difference
Low Melt to Formula Price Difference
1.2d Staple to Formula Price Difference
PET Resin to Formula Price Difference
16
17
18
4/26/2019
7
Fine Denier Staple• ADD + CVD• Filed 5/2017:• China, India, Korea,
Taiwan, • 0 – 220% • Spared: Toray - Korea and
Tainan Spinning –Taiwan
24
26
28
30
32
34
36
38
40
42
44
46
Jan‐17
Jul‐16
c/lb
Jan‐16
Jul‐17
Jan‐18
Jan‐19
Jul‐18
1.2d Staple to Formula Price Difference
Source: Wood Mackenzie Chemicals
US Polyester Supply Chain – Antidumping and Countervailing
PET Resin• ADD + CVD• Filed 3/2015: • Canada, China, India,
Oman• ADD (Filed 9/2017)
Brazil, Indonesia, Korea, Pakistan and Taiwan
• 5 - 276%• Dismissed (10/2018) on
Brazil, India, Korea, Pakistan, Taiwan
Low Melt Fibers• ADD • Filed 6/2017: • Korea and Taiwan • 0 - 52% • Spared: Huvis - Korea
Fine Denier Staple• ADD + CVD• Filed 5/2017:• China, India, Korea,
Taiwan, • 0 – 220% • Spared: Toray - Korea
and Tainan Spinning –Taiwan
20
30
40
50
60
Jan‐16
Jan‐17
c/lb
Jul‐16
Jul‐17
Jan‐18
Jul‐18
Jan‐19
25
30
35
40
45
50
Jan‐16
Jan‐18
c/lb
Jul‐16
Jan‐17
Jul‐18
Jul‐17
Jan‐19
10
15
20
25
30
35
40
Jan‐16
c/lb
Jul‐18
Jan‐17
Jul‐16
Jul‐17
Jan‐18
Low Melt to Formula Price Difference
DTY Filament• ADD + CVD• Filed 10/2018:
China, India• Beginning stages
of investigation50
55
60
65
70
Jan‐18
c/lb
Jan‐16
Jul‐18
Jul‐16
Jan‐17
Jul‐17
150d DTY to Formula Price Difference
150d DTY to Formula Price Difference
Low Melt to Formula Price Difference
1.2d Staple to Formula Price Difference
PET Resin to Formula Price Difference
US Polyester Supply Chain – Antidumping and Countervailing
Low Melt Fibers• ADD • Filed 6/2017: • Korea and
Taiwan • 0 - 52% • Spared: Huvis -
Korea
10
20
30
40
50
Jul‐18
c/lb
Jul‐17
Jan‐17
Jan‐16
Jan‐19
Jul‐16
Jan‐18
Low Melt to Formula Price Difference
Source: Wood Mackenzie Chemicals
US Polyester Supply Chain – Antidumping and Countervailing
19
20
21
4/26/2019
8
PET Resin• ADD + CVD• Filed 3/2015: • Canada, China, India,
Oman• ADD (Filed 9/2017)
Brazil, Indonesia, Korea, Pakistan and Taiwan
• 5 - 276%• Dismissed (10/2018) on
Brazil, India, Korea, Pakistan, Taiwan
Low Melt Fibers• ADD • Filed 6/2017: • Korea and Taiwan • 0 - 52% • Spared: Huvis - Korea
Fine Denier Staple• ADD + CVD• Filed 5/2017:• China, India, Korea,
Taiwan, • 0 – 220% • Spared: Toray - Korea
and Tainan Spinning –Taiwan
20
30
40
50
60
Jul‐16
c/lb
Jan‐19
Jan‐18
Jan‐16
Jan‐17
Jul‐17
Jul‐18
25
30
35
40
45
50
Jan‐16
c/lb
Jan‐18
Jul‐16
Jan‐17
Jul‐17
Jul‐18
Jan‐19
10
20
30
40
50
Jul‐18
c/lb
Jan‐16
Jan‐18
Jan‐17
Jul‐16
Jul‐17
Jan‐19
DTY Filament• ADD + CVD• Filed 10/2018:
China, India• Beginning stages
of investigation50
55
60
65
70
c/lb
Jan‐16
Jul‐17
Jul‐16
Jul‐18
Jan‐17
Jan‐18
150d DTY to Formula Price Difference
150d DTY to Formula Price Difference
Low Melt to Formula Price Difference
1.2d Staple to Formula Price Difference
PET Resin to Formula Price Difference
US Polyester Supply Chain – Antidumping and Countervailing
US Production Index for Other Mills and Apparel (2012=100)
US Economy – Part 4
Since 2012 – some winners and some losers
Source: US Federal Reserve
2012 2013 2014 2015 2016 2017 2018
120
70
60
80
90
100
110
Production In
dex
Textile Product Mills
Fabric Mills
Apparel
Textile Furnishing Mills
Fiber Mills
US Seasonally Adjusted Annual Rate
US Economy – Part 5
US Automotive Production
Source: US Federal Reserve
10
4
2
6
8
12
14
Millions
1980 1990 2000 2010 *2019
Cars
‐2.88%
US Seasonally Adjusted Annual Rate
US Economy – Part 5
US Automotive Production
Source: US Federal Reserve
2
4
6
8
12
0
10
14
Millions
1980 1990 2000 2010 *2019
Lt. Trucks+2.51%
40
41
42
4/26/2019
15
US Seasonally Adjusted Annual Rate
US Economy – Part 5
US Automotive Production
Source: US Federal Reserve
4
10
12
2
6
8
0
14
Millions
Cars
Lt. Trucks
1980 1990 2000 *20192010
Total
Med/Hvy
‐0.33%
Sustainability and Pollution
Sustainability is the looming issue
• How to satisfy demand in a sustainable way• Recycled pre‐ and post‐ consumer waste volumes are small• Huge growth from emerging countries
• Population and income growth• Fast fashion, affordable fashion, rising demand for hygiene products
• Recycling and waste disposal systems are lagging and unprofitable• Business model is for export to emerging economies
• How to measure environmental and social impact of different fibers?• What needs to be measured? • How to measure?• And then, so what?
• Microfiber pollution – who’s problem is it? Does labeling a shirt matter?
43
44
45
4/26/2019
16
And finally…
There is lots of positive news
• Fiber Industries restart of the Wellman polyester staple plant• Investment by PHP and SANS of polyester HDI capacity• Huvis/Indorama JV for low melt spinning in Spartanburg• Parkdale / Intrinsic Textiles JV to develop CiClo (biodegradable) technology• Indorama / Loop Industrties JV to begin production of 100% sustainably produced resin and fiber• Carpet companies upgrading older plants, converting to polyester• US Auto industry – 4th largest sales year in 2018• 5% tire capacity increase last year, with more planned through 2022• Ford cancels Mexico plant, expands US one• Indorama and DAK bought rPET plants• New USMCA expected to close some loopholes• Chinese investment in US spinning mills (Shandong Ruyi in AR, Keer in SC)• US keeps improving environmental footprint of cotton• SewBots to for Tshirt production, now available as a rental• China grows cotton on moon in January – but temperatures kill the budding plant quickly
Laura MurphyResearch Director, FibersWood Mackenzie Chemicals
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