Tight feedstocks threaten PET - CEO of US DAK Americas

07 October 2011 00:27  [Source: ICIS news]

ARTIMINO, Italy (ICIS)--Polyethylene terephthalate (PET) producers could contend with feedstock shortages for several months, the CEO of US-based DAK Americas said on Thursday.

“The certain shortage of paraxylene [PX] is a factor for another two to three years. Plants are operating in the high 80s and low 90s, making things very, very challenging," said Hector Camberos, CEO of DAK Americas, a US subsidiary of the Mexican conglomerate Grupo Alfa.

Camberos was one of the speakers at Global Service International’s ninth annual PET Day in Artimino, Italy.

Other people attending the conference brought up similar concerns about PX, which is used to make purified terephthalic acid (PTA), which feeds into PET.

“I wouldn’t be surprised if PET producers were forced to reduce [utilisation rates] for a lack of PTA. The textile industry will drain PTA,” according to Francesco Zanchi, CEO of GSI.

Camberos estimated that the China PX deficit could double by 2015.

Demand for PX in the Middle East and Africa has grown twofold since 2006. China requirements have nearly doubled and India is also experiencing higher demand. 

The strong correlation between cotton and PX became clear over the last 12 months, when PX peaked partly because of poor cotton harvests. That, in turn, resulted in a large and sudden increase in polyester demand.  

Zanchi said cotton is currently 30-35% more costly than polyester, and it would continue to boost demand for polyester, albeit not at the rate seen in the first half of 2011. 

The value of monoethylene glycol (MEG), another PET feedstock, is also likely to trend upwards. Excess MEG capacity is due to shrink in 2012-2013 and reach 2010 levels by 2016, according to Camberos.

With polyethylene (PE) absorbing a large share ethylene production and MEG’s feedstock ethylene oxide (EO) commanding a smaller portion, PE developments will influence what happens to MEG and, therefore, to PET, he said.

The question of bio-based production was discussed at length during the conference and Camberos said it could be five to 10 years away before it reached mainstream on an economic basis. 

He spoke of the importance of shale gas as a factor that could change the way PET feedstocks behave. 

“Many regions have the potential to produce [shale gas]. It would help keep natural gas very competitive and therefore, the products made from natural gas,” he said.

For more on PET visit ICIS chemical intelligence


By: Caroline Murray
44208 652 3214



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