PET bottle chip exports from the world's largest polyester producer China rose to a record high in the first half of 2019, supported by capacity expansions and tax incentives.
China exported 1.645mn t of PET bottle chip under HS code 390761 in the first six months of this year, up by 21pc compared with the same period last year, Chinese customs data show.
India replaced South Africa as the largest buyer with around 168,400t in the six-month period or 10pc of the total, followed by the Philippines and Russia with 81,000t and 80,400t respectively. China exports PET to over 100 countries.
A rapid expansion of China's PET bottle chip capacity and an increase in value-added tax (VAT) rebates were the two main factors behind the rise in exports.
PET bottle chip capacity in China surged by 40pc from 7.3mn t/yr at the end of 2016 to 10.2mn t/yr at the end of last year, Argus data show.
China's government raised its VAT rebate by 3 percentage points to 16pc in November last year, meaning PET bottle chip producers can now obtain a full VAT rebate for exports of their products. This has strengthened the competitiveness of China's PET bottle chip exports.
Chinese producers are likely to continue their PET bottle chip exports in coming years as capacity expands further. More than 2mn t/yr of new capacity is due to come on stream by the end of 2020, including four production lines owned by Yisheng Petrochemical, Zhejiang Wankai and China Resources.
