11 June 2001 00:00 [Source: ICB]PX remains globally oversupplied, but markets are forecast to come into balance from 2003
The main consumer of paraxylene (PX) is in the production of pure terephthalic acid (PTA), followed by dimethyl terephthalate (DMT), both of which are raw materials for polyester fibre, film and resin. A small amount is used as a solvent and in the production of di-paraxylene and herbicides. PX is the largest volume isomer of mixed xylenes.
Global markets are oversupplied and capacity growth has accelerated year on year since 1995, rising from 11.5m tonne/year to 20.6m tonne/year by 2000, according to PCI Xylenes & Polyesters. Global consumption was 16.5m tonne last year. West European production was over 1.7m tonne in 2000, with operating rates of 86%, against consumption of just above 2m tonne, said PCI.
European markets are currently fairly balanced and supply has eased from the tightness early in the year. The fibres sector remains weak and PET demand is lower than expected. A poor spring season across Europe has led Eastman to cut PET output in Spain, Netherlands and the UK.
High gasoline values for toluene and mixed xylenes in the US has forced BP, ExxonMobil and Koch to shut their TDP units. Poor economics also prompted Chevron Phillips Chemical to idle its Puerto Rico aromatics plant at end February.
The production cuts have consequently led to a 20 000-25 000 tonne/month shortage and the US is now attracting imports from Europe and Asia. About 30 000 tonne has moved out of Europe in May/early June. PCI says that the gasoline market will play an important role in defining producers' price and volume ambitions in coming years.
European quarter two contracts are E567/tonne, up E27/tonne on quarter one (although only a rollover in US dollar terms). Offers of spot material in early June were heard around $475/tonne fob Rotterdam, with bids lower. US quarter two contracts settled up 2.5 cent/lb to 25.75 cent/lb.
European producers are seeking a E100/ tonne increase in quarter three contracts and US players are reported to be asking for a 3 cent/lb rise for July. Margins are still poor and remain well below reinvestment economics. Average world cash margins for the product have dropped below $20/tonne in 1999/2000.
Conventional technology is based on the isomerisation of mixed xylenes from refinery reformate streams or from pyrolysis gasoline. High purity PX can be obtained via crystallisation or selective adsorption such as UOP's Parex and IFP's Eluxyl processes. Toluene disproportionation (TDP) is another route, with the latest catalysts able to produce a PX-rich stream, but with co-product benzene.
Processes have also been developed using a zeolite catalyst for the alkylation of toluene, with methanol to produce PX without co-producing benzene. UOP/BP's Cyclar process, where propane and butane are converted to PX and benzene, was commercialised in Saudi Arabia in 1999.
PX is a colourless, toxic liquid, which is soluble in ethanol but insoluble in water. Pure PX is solid below 13oC. It is flammable and flashback can occur as xylene vapours are heavier than air. Liquid and vapour contact can cause eye, mucous membrane and skin irritation. Overexposure can lead to central nervous system depression, headache, dizziness, nausea and loss of consciousness.
PET is the principal driver of growth and is tipped to account for a third of global PX demand by 2010. PCI forecasts demand growth at about 7%/year to 2006 and markets are expected to soak up excess capacity and become more balanced from 2003 onwards. World operating rates should rise towards 90% by 2003 and an additional 1.3-1.5m tonne/year capacity is needed annually to keep global markets in balance.
Europe is set to stay a net importer with an increase in its import requirements expected from 2002 onwards to feed the planned increases in PTA capacity. DMT will still be an important outlet for PX, especially with growth in polymers such as polybutylene terephthalate (PBT), which is currently growing at 7-9%/year worldwide.
No new PX capacity has been announced in Europe, either expansions or grassroots investment, due to poor economics and limited large scale pools of mixed xylene feedstock to draw on. Several new projects are planned in the Middle and Far East. Iran's NPC will bring onstream over 1.1m tonne/year between 2003-05. Kuwait's PIC has approved its aromatics project, which is now expected in the 2005-06 timeframe.
|Huntsman ICI||Wilton, UK||345|
|Veba Oel||Gelsenkirchen, Germany||130|
|PO Omsknefteorgsintez||Omsk, Russia||205|
*idled since March 1999Source: ECN/CNI
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