Product profile: paraxylene

24 March 2003 00:00  [Source: ICB]

World balances are tightening and with few plants due onstream in the next few years, further investment is needed to support growth in PTA and polyester
 
Uses

Paraxylene (PX) is the largest volume isomer of the mixed xylenes. The primary consumer with about 98% of demand is polyester via its intermediates, purified terephthalic acid (PTA) or dimethyl terephthalate (DMT). A small amount of PX is used as a solvent and to produce di-paraxylene and herbicides.

Supply/demand

A string of production problems across the globe, as well as new PTA startups in Asia have tightened supply and forced prices up. Supply in Asia is very tight as over 2m tonne/year of PTA capacity went onstream in 2002 with 1.55m tonne/year due in quarter two in China, Taiwan and South Korea.

A series of maintenance turnarounds and operating problems kept product short in Europe in early 2003. The market is now said to be balanced to tight with only Polimeri's Priolo unit still down and not likely to restart until the end of April at the earliest. Demand is said to be reasonably good in Europe, but is being mainly driven by demand for export volumes to Asia and the US Gulf. European consumption is set to rise with the startup of Interquisa's 350 000 tonne/year PTA unit in Spain this quarter as well as DuPontSA's 250 000 tonne/year DMT unit in Turkey, which is being readied to restart in July.

West European output was 1.85m tonne in 2002, estimates PCI Xylenes &Polyesters. PCI rates demand in western Europe at nearly 2m tonne last year, up about 5% up on 2001, with about half of the growth in consumption fed by increased imports from outside the region, principally from North America.

Pricing

The European market has seen most buyers and sellers switch to monthly contracts, bringing the sector in line with the US and Asia. However, a minority of consumers in the polyester fibre sector are less keen to shift, arguing it would make them more vulnerable to market volatility. A two-tier system has emerged with monthly contracts running alongside the traditional quarterly contract.

Prices have surged this year. European first quarter contracts jumped by E90/tonne to E580/tonne FD NWE and the March monthly contract settled at E740/tonne FD NWE. One supplier has nominated E800/tonne for the second quarter contract. Spot markets remain volatile. Levels soared past $900/tonne in early February but have since dropped back to $800-830/tonne fob.

Asian numbers are high with offers in early March at $860-880/tonne fob Korea. The nomination for April contracts is at $850-870/tonne. US spot offers are at $860-870/tonne fob US Gulf with the March contract settled (except for one player) at 36.75 cent/lb, up 6.75 cent/lb on February.

Technology

Conventional technology is based on the isomerisation of mixed xylenes from refinery reformate streams or from pyrolysis gasoline. High purity product can be obtained using crystallisation or selective adsorptive separation, 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 with co-producing benzene. UOP/BP's Cyclar technology which converts propane and butane to PX and benzene was commercialised in Saudi Arabia in 1999.

Health and safety

PX is a clear flammable liquid. Flashback can occur as the vapours are heavier than air. It can irritate the eyes, mucous membranes and skin. Overexposure can lead to central nervous system depression, headache, dizziness, nausea and unconsciousness.

Outlook

PCI forecasts growth in western Europe at 9%/year during 2002-05, and at 7.3%/year for 2002-08. Global demand growth is rated by PCI at 8.2%/year for 2002-05 and at 7.1%/year to 2008.

PCI says that global balances are beginning to tighten and this will continue over the next three years with availability becoming critical post-2006 in the absence of any new investment. Players believe it is more likely idled units will restart before any more new capacity is built. Plants are dormant at Chevron Phillips in Puerto Rico, Coastal in Canada and ExxonMobil in Singapore. Additional feedstock from the European Auto Oil 2 directive in 2005 could also spur new investment. Nearly 1.2m tonne/year new PX capacity will come onstream in Iran by 2005, and Kuwait's PIC plans a 670 000 tonne/year unit by 2006.

European paraxylene capacity, '000 tonne/year
Company Location Capacity

Atofina

Gonfreville, France 135

BP

Geel, Belgium 420

Cepsa

Algeciras, Spain 100

ExxonMobil

Botlek, Netherlands 500

Huntsman Petrochemicals

Wilton, UK 345

INA

Sisak, Croatia 73

Kirishinefteorgsintez

Kirishi, Russia 80

Lukoil Neftochim

Burgas, Bulgaria 15

Omsk Refinery

Omsk, Russia 205

PCK

Schwedt, Germany 60

Petkim

Aliaga, Turkey 120

Petrobrazi

Brazi, Romania 20

Petrogal

Oporto, Portugal 125

Petromidia

Midia, Romania 20

PKN

Plock, Poland 48

Polimeri Europa

Priolo, Italy 190
Sarroch, Italy 100

Rompetrol

Navodari, Romania 20

Ruhr Oel

Gelsenkirchen,
Germany 130

Shell & DEA Oil

Wesseling, Germany 130

Slovnaft

Bratislava, Slovakia 50

Ufaneftekhim

Ufa, Russia 180
Source: ECN/CNI




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