Factors Driving Monoethylene Glycol Market
By: Sonam Roy
Market drivers are the positive factors that are expected to promote and push the growth of the industry, also are the factors responsible for the development of the new market. Market drivers play key role in formulating the business strategy to increase their revenue with the overall growth of the industry.
Some of the key drivers of MEG market are:
*Increasing production of Polyester
The major factor that is driving the growth of Monoethylene Glycol market is the rising demand of Polyester fibres from the global textile industry. About 0.345 Kg of MEG is used to make 1 Kg of Polyester. The production of Polyester fibres in the past years has been increasing. This increasing trend will also be noticed in the coming years. The production of Polyester fibre will grow by 5-6% over the forecast period i.e. by 2020. This growth is anticipated, owing to growing worldwide demand of apparels, home furnishings, yarns, and ropes.
The major application of MEG is in production of Polyester, thus the MEG market is directly related to Polyester market. The positive future outlook of Polyester market will boost the market for MEG in near future.
Asia has been the major producer of Polyester fibre in the World and is forecast to continue to remain so in near future. The Asian Polyester fibre production is projected to grow at the highest CAGR of 6.0% from 2015 to 2020. Asia has the highest market share of 92.7% in global production of Polyester fibre for year 2014. Thus, Asia would have highest consumption as well as demand for MEG. In order, to fulfill this demand majority of manufacturers are expanding their production capacities in Asia by following both organic as well as inorganic growth strategies.
The production of Polyester fibre in the Middle East is projected to grow at a CAGR of 3.4% from 2015 to 2020. The primary reason for this growth is that the production of Paraxylene is already significant in Middle East, but PTA and PET Resin are a more recent phenomenon and are growing fast, stimulated by the recognition that it is easier to obtain overall profitability in the Polyester chain with full vertical integration. The fast-growing nature of economies in the region also means that growth in domestic demand, for chemicals generally and PET packaging resin specifically, is very attractive. This strong demand growth is supplemented by robust export markets, which the Middle East is well placed to serve. The growing market of Polyester in the Middle East will be indeed an opportunity for MEG manufacturers to gain higher market share.