08 February 2010 00:20 [Source: ICB]
The second-largest use is in unsaturated polyester resins (UPR), which are used to produce fiberglass-reinforced resins and have major outlets in the automotive, marine and construction sectors. Other applications include the production of alkyd resins and various specialty compounds.
Demand in Europe slumped in 2009, with estimates averaging a fall of 20-30% compared with 2008, as the major automotive and construction end-use sectors were hit by the global recession. This followed three strong years from 2006-2008, when demand was healthy and utilization rates were at 98-99%.
Demand remains lackluster in early 2010 and supply is balanced to tight, with ongoing production issues on PA and orthoxylene (OX) feedstock. Availability of flake material is snug because of strong demand for European material in China and the Middle East, where supply is short. Limited supply outside Europe has also restricted imports.
European contracts are mostly settled on a formula relating to OX feedstock, as producers and buyers move away from freely negotiated deals in a bid for better price stability. January contracts settled up €30/tonne at €915-1,010/tonne for liquid and €825-870/tonne for flake, reflecting the OX increase.
Spot levels in late January were rising because of low availability, particularly for flake. Liquid material was available at €850-900/tonne, with flake at €870-920/tonne.
Producers say margins have steadily declined after 2007 and have been squeezed particularly tightly in 2009 and early 2010, as prices have at times lagged OX costs.
The dominant route via OX has largely superseded naphthalene-based technology. OX is catalytically oxidized in a fixed-bed reactor and the reactor effluent containing PA vapors is cooled and sublimated in condensers.
The crude PA is purified by vacuum distillation and then stored in either a molten state or bagged as flakes.
Europe is heading for a period of consolidation to address the lack of profitability and the region's excess supply. Most players expect some moves in 2010-2011.
Post-crisis, Europe is expected to return to longer-term growth of 2-3%, driven mainly by strong demand in Central and Eastern Europe, particularly in construction.
No new projects are proposed worldwide at present, following a large buildup of capacity in Asia, mainly China.
Demand will continue to move away from dioctyl phthalate (DOP) to alternative plasticizers, but this shift is expected to be complete in the next one to two years. US-based SRI Consulting predicts global growth for phthalate plasticizers to average 1.6%/year to 2013.
EUROPEAN PHTHALIC ANHYDRIDE CAPACITY, '000 TONNES/YEAR
|Angarsk Petrochemical||Angarsk, Russia*||15|
|Atmosa Petrochemie||Schwechat, Austria||48|
|Avdeevka By-product Coke Plant||Avdeevka, Ukraine||25|
|Destilacija Teslic||Teslic, Boznia-Herzegovina||16|
|Deza||Valasske Mezirici, Slovakia||35|
|JSC Ural Chemical||Nizhniy Tagil, Russia*||7|
|Oltchim||Rimnicu Vilcea, Romania||20|
|Omsk Chemical||Omsk, Russia*||40|
|Perstorp Oxo||Nol, Sweden||35|
|Polynt||San Giovanni Valdarno, Italy||30|
|VFT Belgium||Zelzate, Belgium||20|
|West-Siberian Steel||Novokuznetsk, Russia*||10|
|ZA Kedzierzyn||Kedzierzyn, Poland||24|
|SOURCE: ICIS PLANTS & PROJECTS|
* operational status unclear
Profile last published February 26, 2007
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