Polyethylene Terephthalate (PET) & Polybutylene Terephthalate (PBT) Resins Market

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The global Polyethylene Terephthalate (PET) resin market size was USD 28.1 billion in 2020 and is projected to reach USD 52.2 billion by 2026. It is anticipated to register a CAGR of 6.1% between 2021 and 2026. PET is the only recyclable polyester and is used in different applications compared to the other thermosetting materials. This advantage of being reusable helps the manufacturers to have a cost advantage. The global Polybutylene Terephthalate (PBT) resin market size was USD 3.1 billion in 2020 and is projected to reach USD 5.3 billion by 2026. It is anticipated to register a CAGR of 5.1% between 2021 and 2026. The automotive manufacturers are using PBT materials in their car production to overcome the challenges, such as reducing fuel consumption, CO2 emissions, and lightweight regulations by the European Commission. PBT is lightweight compared to steel and aluminum used in automotive cars. Therefore, it drives the demand for PBT.

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Impact of COVID-19 on PET & PBT Resins Market

The novel coronavirus pandemic had created ripples across the global industries, affecting the global supply chains, which move materials and components rapidly across borders and fabrication facilities. This had resulted in delays or non-arrival of raw materials, disrupted financial flows, and growing absenteeism among production line workers. These factors have affected the world’s economy and performance of different industries. The loss of various industry had directly affected the PET & PBT resins market.

Market Dynamics

Driver: PET is a highly recyclable plastic resin

Recycled Polyethylene Terephthalate (rPET) is a highly recyclable plastic and one of the most widely used recycled plastic across the globe. rPET is used for various applications such as fiber for carpets, clothes, upholstery, sweaters, fiberfill for sleeping bags and cushions, sheet and film, and automotive parts. Various major global beverage and fast-moving consumer goods companies worldwide have committed to including 50% recycled content in their plastic packaging by 2030. Therefore, the demand for food-grade-certified recycled materials is expected to increase. However, the current limited global supply of food-grade recycled plastic makes it challenging for these brands to secure sufficient volumes of high-quality food-grade rPET in the longer term. Few rPET converters have identified this as an opportunity to expand their food-grade rPET production capacities domestically and abroad.

The EU directive includes a target of incorporating 25% recycled content in all PET beverage bottles from 2025 and increasing this to 30% by 2030. Leading brands such as Coca-Cola, Danone, and PepsiCo have called for a projected 50% use of rPET in their bottles by 2030. The demand for food-grade rPET is expected to increase by 10­–15% in India and Southeast Asia by 2030, almost solely driven by the packaging sustainability targets set by global food &beverage (F&B) companies. This is expected to drive investments in collection/recycling capacities in the region.

Restraint: Fluctuations in raw material prices

Availability of raw materials is one of the crucial factors directly affecting the end-product market. The surge in crude oil and petrochemicals' prices has increased the cost of raw materials significantly. The economy plays a vital role in establishing plastics prices. The price of PET resin is determined primarily by market dynamics and influenced by the price of crude oil.

Fluctuations in prices of raw materials increase the operating cost, resulting in an expensive end product. PET resin is manufactured from crude oils; hence, changes in crude oil prices will impact the price of PET resin. The rise in raw material costs has added a limiting factor to the growth of the PET packaging market.
Factors influencing price:

• Crude oil price is a significant factor in plastic production; all modern plastics are produced from feedstocks derived from petrochemicals.
• The plastics industry is at risk due to outages and technical problems, which might result in production disruptions.
• The plastics industry is highly responsive to fluctuations in the price differential in major producing regions (Asia, Europe, and North America). When there are incidences of difference in prices between two markets, industry players are quick to take advantage of this and supply to the market where prices are high.

Plastics are also widely used in other applications, such as the textile industry. PET used in the textile industry is referred to as polyester. When demand for polyester rises in the textile industry, it consumes a larger share of raw material, reducing the availability of raw materials for packaging applications.

Opportunity: Increasing demand for sustainable packaging solutions

Rising concerns about environmental pollution have increased the demand for environment-friendly and sustainable packaging solutions, including recycled plastic. Packaging manufacturers are focusing on developing sustainable and green packaging products which can be recycled and reused. These manufacturers are investing in R&D activities and technologies to develop sustainable packaging solutions which are environment-friendly, cost-effective and do not compromise on the protection level offered to the packed product. Leading brands such as Coca-Cola, Danone, and PepsiCo have called for the 50% use of rPET in their bottles by 2030. PepsiCo has announced a goal of 25% recycled content in all beverage bottles by 2025, and Keurig Dr Pepper has stated that it will reduce its use of virgin plastic by 25% by 2025. Beverage manufacturers are seeking flexible and easy-to-adjust machines, enabling them to accommodate fluctuations in the quality of rPET. Such initiatives for the development of sustainable packaging materials are projected to provide opportunities for growth for manufacturers in the rPET market.

Challenge: High costs of recycled plastics

The basic raw materials required for the manufacture of virgin plastics are petrochemicals such as oil and natural gas. The recycled form of plastic is R-polyethylene terephthalate (rPET). According to Tim Gutowski, a professor of mechanical engineering, the problem associated with recycling plastic is the generation of a pure stream of recycled material. Several additives are added while manufacturing plastic products; some of these are fillers and colorants. Recycling companies are not usually aware of the elements added to plastic that affect the manufacturing of recycled plastic products. Sorting and separating plastic (according to its different grades, kinds, and mixtures of additives used) is highly labor-intensive and expensive than manufacturing new plastic products from petrochemicals, which is inexpensive.

For years, making plastic products from recycled flakes was cheaper than relying on virgin plastics made using fossil fuels, meaning the sustainable option was economical. Since 2019, virgin PET has become cheaper to manufacture due to the significant production of petrochemicals by the US driven by the shale gas boom. The drop in the prices of virgin PET could lead cost-based buyers who have not already done so to return to purchasing virgin material to the detriment of any sustainability targets.

Due to the outbreak of COVID-19, oil prices dropped significantly, leading to the lower manufacturing cost of virgin PET than that of rPET. Some factories in China mix cheaper virgin plastic with recycled plastic and sell it as 100% post-consumer content. The rPET value chain involves various entities, including collectors, recyclers, end-users. At each stage, there is potential for yield loss and inefficiency. These factors cause price variations in rPET in different regions leading to high costs of recycled plastics.

Transparent & Non-Transparent PET is estimated to account for the largest share of the PET resin market during the forecast period

The transparent & non-transparent PET segment accounts for the larger share of the overall PET resin market. APET is increasingly used for packaging carbonated soft drinks (CSD), juices, and water. In the food & beverage industry, the CPET application is used in containers and trays that can be used to reheat in the oven or microwave. Additionally, CPET is also used in bottles made for carbonated soft drinks, alcoholic beverages, and other edibles.

Bottles to be the fastest-growing application segment of the PET resin market during the forecast period.

Based on application, the PET resin market is segmented into bottles, films, food packaging and others. The bottles segment is the fastest growing application of PET resin market during the forecast period. The advantages of conventional packaging plastics have increased engineering plastic products such as PET containers and bottles in the packaging sector. The increased consumption of PET has increased the demand from industries like food and beverage, consumer goods, and others for packing materials.

The electrical & electronics segment is estimated to be the fastest-growing application of the PBT resins market during the forecast period.

Based on application, the PBT resin market is segmented into electrical & electronics, automotive, consumer appliances and others. The electrical & electronics segment is the fastest-growing application of PBT resin market during the forecast period. The key driver of the electrical & electronics industry is socio-economic development, including the rise in disposable income, particularly in the emerging markets. The above factors will drive the PBT resin market in the Asia Pacific during the next five years. The markets in China, India, and other rapidly emerging countries are expected to witness strong growth in this segment. In contrast, developed markets such as the US, Germany, Japan, and the UK are expected to grow at slow rates during the forecast period. The demand for PBT in electronic components and assembly is expected to continue to create new growth opportunities for the market. The increased use of PBT resin in the electrical & electronics segment continues to drive the PBT resin market.

Asia Pacific to account for the largest share of the global PET & PBT resins market during the forecast period.

Asia Pacific is expected to dominate the PET & PBT resins market during the forecast period. Growing demand for PET resin in different applications, especially bottles, films, and food packaging segments. PBT is replacing metal in many areas with the same thermo-mechanical properties in automotive applications, eventually driving the PBT resin market. Growth in auto sales and electronics market in emerging economies is also expected to boost the PBT resin market.

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Europe to account for the second-largest share of the global PET & PBT resins market during the forecast period.

Europe is the second-largest market for PET & PBT resins. The region has started increasing regulations and guidelines for the packaging industry for developments in design and materials which are sustainable and easily recyclable. Sluggish economic growth, mature markets, and stringent environmental policies in the European region are the major restraining factors in the market. Demand for products is expected to continue at a steady pace, with expected economic growth trends. PET has a high demand for the production of bottles for all varieties of liquids such as water, carbonated drinks, oils and various others. PET is expected to continue to have a high demand as it is not single-use and can be recycled multiple times.

Europe has leading automotive industries in countries such as Germany. It is the leading manufacturer in the region. Germany accounted for 25% of the cars manufactured in Europe in 2020. The increasing number of cars being manufactured is, in turn, leading to the rising demand for PBT resin

Key Market Players

Indorama Ventures Limited (Bangkok), Mitsubishi Chemical Corporation (Japan), SABIC (Saudi Arabia), BASF (Germany), Alpek (Mexico) are some of the players operating in the global market.

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Scope of the Report

This research report categorizes the PET & PBT resins market based on PET Type, PET Application, PBT Application, and region.

Based on PET type, the PET resin market has been segmented as follows:

• Transparent & Non-Transparent PET
• Recycled PET

Based on PET application, the PET resin market has been segmented as follows:

• Bottles
• Films
• Food Packaging
• Others (pharmaceutical and medical applications, home cleaning products, cosmetics, personal care, and detergents)

Based on PBT application, the PBT resin market has been segmented as follows:

• Electrical & Electronics
• Automotive
• Consumer Appliances
• Others (furniture, industrial scale cable connector, medical devices, sporting goods, industrial parts, and packaging components)

Based on the region, the PET & PBT resins market has been segmented as follows:

• Asia Pacific
• North America
• Europe
• Middle East & Africa
• South America

Recent Developments

• In January 2022, SABIC launched two novel polybutylene terephthalate (PBT) compounds, LNP Elcrin WF006XXPiQ and LNP Elcrin WF0061XPiQ. These are the first two grades of a new material range that includes pre-consumer recycled glass fibers retrieved from waste streams in industrial processes.
• In July 2019, BASF launched the worldwide first thermoformable PBT for extrusion and thermoforming. The material is a great choice for extrusion of films and thermoforming of packaging or technical parts.

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