Product profile: Phthalic anhydride

13 October 2003 00:00  [Source: ICB]

Europe is struggling with excess capacity, poor demand and low prices. More closures are needed to restore a healthier balance

Phthalic anhydride (PA) is primarily used in the manufacture of phthalate esters, mainly dioctyl phthalate (DOP), used as plasticisers in polyvinyl chloride (PVC). Other major uses are in unsaturated polyester resins (upr) and in alkyd resins. However, the latter, used in solvent-based protective coatings, is declining as water-borne technologies take over.


This year started positively with tight availability and strong sales to Asia, and China in particular, which supported higher prices in Europe. However, demand dropped in quarter two (Q2) and was very poor as the general slowdown, Sars (severe acute respiratory syndrome) and the Iraq war all took their toll.

Asian sales slumped and exports to the Middle East and Turkey dried up too. In addition, the weak US dollar attracted a flood of cheap flake imports from South Korea and Brazil which pressured prices. Overall demand in Europe is expected to be worse this year than in 2002. However, players say sales have picked up in September and October looks promising. Imports have also tailed off.

Production in western Europe was around 675 000 tonne last year notes DeWitt consultancy and little change is expected in 2003. The industry has seen further ration­alisation with BASF closing its 17 000 tonne/year plant in Tarragona, Spain, at the end of 2002 - a move which has helped to bring some balance back into the market. Lonza has postponed the divestment of its polymer intermediates business following the failure of two deals to venture capitalists last year.


Prices are based on a formula relating to the cost of orthoxylene (OX) feedstock. European Q3 contracts followed OX's descent, dropping by about €100/tonne to €700-730/tonne FD before discounts for molten material. Players are awaiting the settlement of OX contracts for Q4 with ideas ranging from a rollover of Q3's €418/tonne to an increase of €20-40/tonne. Spot prices for both molten and flake are back up to €680-700/tonne FD.


The dominant route to produce PA is via OX which has largely superseded naphthalene-based technology. OX is catalytically oxidised in a fixed-bed reactor and the reactor effluent containing PA vapours is cooled and sublimated in condensers. The crude PA is purified in a vacuum distillation system. Research is focused on improving catalysts and one development has been the lowering of the air to OX weight ratio allowing a reduction in capital and energy costs.

Health and safety

PA is a white crystalline solid or clear molten liquid with an irritating odour. It is stable but reacts with moisture to form phthalic acid which corrodes metals. It reacts with strong oxidants, is combustible and dust may form explosive mixtures with air. It is harmful if swallowed or inhaled. It irritates the eyes, nose and skin.


Demand growth in Europe is low. The upr sector will see growth at GDP rates. Demand into DOP is declining as health issues dominate the use of plasticisers in PVC. However, any reduction in consumption is likely to be offset by the shift to alternative diisononyl phthalate (DINP) as, although less PA is used in DINP, the amount needed in the plasticiser is higher.

Players expect further rationalisation to take place in Europe as it continues to grapple with overcapacity and intense price competition. Players say one or two small scale plants might close next year. Oltchim's new 20 000 tonne/year plant in Rimnnicu Vilcea, Romania, is scheduled to start production next month.

Most new investment is focused on Asia, and mainly China where several projects are slated for 2004-06. Expansions are also planned in India, Brazil and Thailand. A new plant in Iran is due in 2006.

European phthalic anhydride capacity, '000 tonne/year

Company Location Capacity

Angarsk PCC

Angarsk, Russia* 15


Schwechat, Austria 50


Chauny, France 90

Avdeevsk Coke Chemical

Avdeevka, Ukraine 25


Feluy, Belgium 90
Ludwigshafen, Germany 120


Krefeld, Germany 85


Algeciras, Spain 30

Destilacifa Dova

Teslic, Bosnia-Herzegovina 2


Valasske Mezirici, Slovakia 25


Botlek, Netherlands 70


Omsk, Russia* 40


Perm, Russia 75


Koper, Slovenia 30

Koksno Komb Boris Kidric

Teslic, Bosnia-Herzegovina 16


Scunthorpe, UK 7


Rubezhansk, Ukraine 60


Lida, Belarus 21


San Giovanni Valdarno, Italy 30
Scanzorosciate, Italy 80


Fuzfogyartelep, Hungary 30


Ruse, Bulgaria 20

Perstorp Oxo

Nol, Sweden 30


Aliaga, Turkey 30


Brazi, Romania 36


Ostend, Belgium 100


Salavat, Russia 15


Timisoara, Romania 24


Bratislava, Slovakia 38

Ural Chemical

Urals, Russia 9

West-Siberian Steel (ZSMK)

Novokuznetsk, Russia 10

Zaklady Azotowe Kedzierzyn

Kedzierzyn, Poland 30

* believed to be idled

Source: Dewitt/ECN/CNI

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