USES

Nearly all of the output of purified terephthalic acid (PTA) is consumed in the production of polyester, including polyester fibre, polyethylene terephthalate (PET) bottle resin and polyester film. Other, smaller outlets for PTA are cyclohexanedimethanol, terephthaloyl chloride, copolyester-ether elastomers, plasticizers and liquid crystal polymers. In the US, demand primarily comes from the production of PET bottle resin.

SUPPLY/DEMAND

US PTA plants are in North and South Carolina, Alabama, Mississippi and Tennessee, so production was not disrupted in August 2017 by Hurricane Harvey. No interruptions to production were known despite the storm’s impact on production of feedstock paraxylene (PX).

Demand for PTA in the US was muted in the second half of 2017 along with feedstock PX. Lower demand was attributed to reduced PET production capacity throughout the Americas, which carried into 2018.

Italy-based PET producer Mossi & Ghisolfi (M&G) was forced to shutter its PET resin plant in West Virginia and to temporarily stop PET resin production in Altamira, Mexico, in autumn 2017 amid financial difficulties.

The company became saddled with $1.7bn of debt because of the construction of its giant PET/PTA complex in Corpus Christi, Texas. M&G subsequently filed for bankruptcy protection in October 2017 and started a sales process for its US plants. US PET capacity remains restricted as the West Virginia plant is still idled and the Corpus Christi plant is unfinished. Taiwanese PET producer Far Eastern New Century purchased the West Virginia plant, but plans for a restart are not yet known.

In March, a consortium led by Mexico’s Alpek and Thailand’s Indorama Ventures agreed to buy M&G USA Corp’s PTA and PET plant in Corpus Christi for $1.125bn through a joint venture, CC Polymers. Another partner in the venture is Far Eastern Investment, a subsidiary of Far Eastern New Century Corporation.

Each stakeholder will have the right to receive a third of the PET and PTA produced at the site, with capacity estimated at 1.1m tonnes/year and 1.3m tonnes/year, respectively, making it the largest facility of its kind in the world. A timeline for the completion of the plant will be communicated at a later date, the companies said. Before the announcement, market sources had anticipated the plant to operate by late 2019 at the earliest. This will greatly impact future PTA consumption in the US.

M&G’s Mexico plant has restarted its operations, although it is running at reduced rates. The US PET market is approaching the summer peak consumption season, which could increase demand for PTA.

In Asia, the market outlook also became uncertain, with a change in sentiment from bullish to bearish in March. The fluctuations in upstream crude and the possibility of implications for petrochemical trades stemming from the US plan to impose tariffs on steel and aluminium imports added uncertainty to the PTA market.

PRICES

PTA contract prices have been on an uptrend since August 2017, tracking rising prices for PX.

Initially, prices spiked in response to Harvey’s direct hit on the Texas Gulf Coast. The storm knocked more than 40% of US PX production off line and impeded logistics, delaying shipments to PTA producers. Production of PX began to normalise in November.

PTA prices settled downward somewhat in October, but then began climbing with crude prices. PX and PTA prices remain at their highest levels since August 2015.

For US February contracts, ICIS assessed PTA prices at 48.87 cents/lb ($1,077/tonne), tracking rising prices in February for PX.
The US PTA price is not freely negotiated and, for the purpose of the ICIS assessment, its movement is equivalent to 67% of the US PX price delta for the month in which it was settled.

TECHNOLOGY

Initially, PTA was produced by the oxidation of PX using dilute nitric acid and, later, air. It was the first product to be made commercially this process.

Modern technologies produce PTA by the catalytic liquid-phase oxidation of PX in acetic acid, which is done in the presence of air and uses manganese or cobalt acetate as a catalyst. PTA is purified in a crystalliser, where unreacted xylene and water are flashed off.

PTA technology has been led by BP and fibres producer Advansa. BP claims to have simplified the process, offering savings in capital and operating costs with the optimal plant size at 700,000 tonnes/year. Processes have also been developed by USbased Dow and Eastman, as well as Japan’s Mitsubishi Chemical and Mitsui Chemicals.

OUTLOOK

There is some uncertainty for the US PTA market. Much will hinge on when reduced US capacity will return after the M&G asset sales.