Uses

Paraxylene (PX) is mainly used to produce purified terephthalic acid (PTA). Other outlets include dimethyl terephthalate (DMT), di-paraxylene, herbicides and solvents. Both PTA and DMT are used to make polyethylene terephthalate (PET). DMT is also used to manufacture polybutylene terephthalate (PBT) resin.

Approximately 97% of PX demand comes from the polyester chain via PTA or DMT. The breakdown for polyester demand is 65% from fibre, 27% from PET bottle resin and 8% from film and other plastic end-uses.

Orthoxylene (OX) is the second largest of three commercial isomers of xylene. Nearly all OX output is consumed in the manufacture of phthalic anhydride (PA). PA has three major applications: as phthalate plasticizers used in compounding polyvinyl chloride (PVC); in unsaturated polyester resins (UPRs) for glass-reinforced thermoset engineering applications; and in alkyd resins used for surface coatings.

Other OX outlets are in solvents, bactericides, soybean herbicides and lube oil additives.

Supply/demand

The largest US PX producers are BP – which recently announced the sale of its chemicals business to INEOS - and Indorama Ventures, which produces PX for internal use for PTA to be used in PET. ExxonMobil and Flint Hills Resources produce PX for the merchant market.

US PX capacity has been lower since the end of 2018, when Chevron Phillips closed its PX plant in Pascagoula, Mississippi. In 2019, production was even lower on poor margins that made purchasing PX more economical.

In March and April 2020, US PX supply increased as large shipments intended for China moved to the US while China was on lockdown.

PET demand peaked early in Q2 amid panic buying of hygiene items and food. PET production ran hard from March into Q3. Q2 typically marks the start of PET peak season, but demand weakened as consumers worked their way through bulk quantities of bottled water and hand sanitizer. As summer events were cancelled and travel curtailed, drink sales nosedived.

In late spring BP had planned maintenance on its PX unit Texas City, Texas.

OX supply has been sufficient to meet demand, which was higher than usual as buyers in the US Midwest stocked up over the past year ahead of maintenance closures on the Illinois river system where most OX is transported from the US Gulf to the Chicago area.

Prices

Although US April PX contracts failed to reach a settlement, ICIS assessed monthly prices at a 16-year low. As crude oil prices rebounded, so did PX contracts, but in July they remained 30% below January levels. PX spot prices bottomed out in late April at around 17 cents/lb, nearly 60% below January levels.

OX contracts followed trends in upstream crude and MX, crashing in March and recovering slowly through July.

Technology

Conventional technology is based on the isomerisation of MX from refinery reformate streams or from pyrolysis gasoline (pygas). High-purity product can be obtained using crystallisation or selective adsorptive separation. Alternative methods are toluene disproportionation (TDP) and STDP. STDP produces a PX-rich stream of MX – over 90% purity. TDP and STDP co-produce benzene.

Processes have been developed using a zeolite catalyst for the alkylation of toluene with methanol to produce PX without benzene co-product. The UOP Cyclar process converts propane and butane to PX and benzene. A bio-based route to PX has also been developed.

OX comes from the production of MX, which involves the high-severity catalytic reforming of naphtha. From this, a C8 stream contains ortho-, meta-, and paraxylenes, as well as ethylbenzene (EB).

Xylenes are also obtained from the pygas stream in a naphtha cracker and by TDP. The xylenes are passed through a splitter, and the bottom stream, which contains a targeted amount of OX, is sent to an OX distillation column to produce high-purity product.

Outlook

In the US, squeezed margins will likely continue to discourage PX production, amid a wave new Asia capacity. US demand will remain below normal as long as coronavirus precautions are in place and consumer spending is muted.

The integrated PET/PTA project by CC Polymers is on hold due to the coronavirus and higher costs. Operations were expected to start by 2022 but this has not been updated.

OX supply and demand should remain balanced, although the long-term future of downstream phthalates is yet to be determined. ■