Polyethylene terephthalate (PET) comes in both amorphous (transparent) and semi-crystalline (opaque and white) thermoplastic form. PET can be made into a resin, film or fibre and has good processability that allows it to be recycled for other applications or returned to its constituent monomers.
PET’s largest outlet is in the production of synthetic fibres, namely polyester. Bottle resin production is the next-largest use.
ICIS only covers bottle-grade PET in the US, for which the peak consumption season is the spring and summer, when warmer weather drives sales of bottled beverages.
This year, PET bottle-grade resin demand did not pick up as strongly as expected in the spring. Market participants said that cool weather from winter lasted longer than normal, which dampened bottled beverage consumption.
Demand finally began showing its seasonality strength in June to July and remains firm. Demand is expected to taper off in the fall and slow to its seasonal low point in the winter.
Year-to-date (YTD) PET exports increased 8.2% to 124,697 tonnes in the January-to-May period from 115,238 tonnes in the same YTD period in 2013, according to data made available by the US International Trade Commission (ITC).
Meanwhile, YTD PET imports rose 21% to 237,746 tonnes in January-to-May from 196,447 tonnes in the same period last year.
Globally, PET supply is systemically long. The planned closure of DAK Americas’s Cape Fear, North Carolina, PET plant in September 2013 hardly made a dent in US PET supply, market sources said.
There was a brief period of tightened supply in the 2014 first quarter on the back of a force majeure (FM) on purified isophthalic acid (PIA) by Flint Hills Resources in February when its Joliet, Illinois, manufacturing plant shut down because of mechanical failures.
The reduction of PIA output also meant a reduction of co-produced purified terephthalic acid (PTA) output. PTA is an isomer of PIA and the direct feedstock of PET. The FM was lifted by the end of second quarter as the Flint Hills Resources plant returned to normal operations, PET market sources said. PET is no longer tight.
US PET monthly negotiated domestic prices are on an uptrend in the third quarter on the back of rising feedstock and raw material costs. Upstream costs are the main drivers for PET price movement.
June prices were settled up by 1.5-2.0 cents/lb ($33-44/tonne) from May. PET was assessed at 82.00-87.00 cents/lb stretch blow moulding (SBM) delivered (DEL) in June from 80.50-85.00 cents/lb SBM DEL in May, as assessed by ICIS. The higher prices come on the back of an increase in the upstream paraxylene (PX) contract price for June, which also raised the June PTA contract price, on a formula-based correlation.
July PET prices are expected to settle in the latter half of the month, when the July PX contract and raw material prices are settled. Market players largely expect PX to increase again.
PET producers announced 5 cents/lb increases for July, an upward revision from their initial 3-cent/lb increase announcements because discussions moved higher for the PX July increase.
PET is made from monoethylene glycol (MEG) and PTA or dimethyl terephthalate (DMT), although PTA tends to be the preferred stock. PTA input into PET is 70% while MEG’s input is 30%.
The main process steps include raw material preparation, esterification/transesterification, pre-polycondensation and polycondensation.
US chemical group DuPont, in alliance with US engineering firm Fluor Daniel, developed an NG3 process in South Carolina that was commercialized in 2007 and was said to reduce steps and lower capital costs.
In addition, UK catalysts producer Johnson Matthey has a titanium catalyst that can increase plant capacity by 15%.
New capacity is expected to come on stream in the next couple of years as PET producer Mossi & Ghisolfi (M&G) is building a new integrated PET/PTA manufacturing facility in Corpus Christi, Texas. The new facility is expected to begin operation in 2016 or a little earlier and have a capacity of 1m tonnes PET and 1.2m tonnes PTA.
Meanwhile AlphaPet, a subsidiary of PET producer Indorama Ventures, is planning a new 500,000 tonnes/year PET plant in Decatur, Alabama, which is so far expected to con on stream in the fourth quarter of 2016.