M&G counters critics of massive US complex

Mossi & Ghisolfi says it may delay a new PTA plant at its Gulf Coast site, but the PET plant is on schedule for late 2016. Chemical plants are seen across Nueces Bay at Corpus Christi, Texas. (IMAGE: Sarah Richter/Wikimedia)

HOUSTON (ICIS)–Mossi & Ghisolfi (M&G) is firing back at critics who question the construction of a massive resin complex on the Gulf Coast amid an oversupplied market.

M&G officials told ICIS on Thursday that they may delay a new purified terephthalatic acid (PTA) plant in Corpus Christi, Texas, until early 2017, but the polyethylene terephthalate (PET) plant is still on schedule for late 2016.

M&G’s Corpus Christi integrated PET/PTA complex is expected to produce 1.1m tonnes/year of PET and 1.3m tonnes/year of PTA.

There had been market sentiment in recent months that the complex had been delayed well over a year, into late 2017 or 2018.

But M&G on Thursday disputed that sentiment.

PTA production will be delayed, but PET will still be produced by raw materials procured from outside vendors, the company said.

“The Corpus Christi facility will start supplying our customers by the end of 2016, as planned,” the company said in a statement. “There may be a delay of a few months, into H1 17, for the plant supplying the main raw material, PTA, but feedstock has been secured to run PET also with purchased PTA, as a temporary solution. In the end, there’s no change for our customers as they will get PET from Corpus Christi as planned this year.”

The opening of the M&G complex has been debated and discussed in the North American PET market since it was announced in 2011. The complex is going to add more capacity to an already-oversupplied US PET market. US PET capacity is already at about 2.5m tonnes/year.

PET market participants in both North and South America have long-wondered if the complex will be delayed, due to market conditions. Furthermore, there has been confusion on whether M&G’s PET plant in Altamira, Mexico will be impacted by the Texas Complex. The Altamira plant produces 590,000 tonnes/year of PET, most of which is exported to the US.

M&G has given no indication on the future status of that plant.

Indorama, DAK and Nan Ya Plastics already have a strong presence in US PET production. Indorama purchased BP’s PTA plant in Alabama, giving it a strong foothold in PET feedstocks.

Others in the PET market said this week that even if M&G’s plant opens at the end of this year, they will still have trouble in an oversaturated market.

“They know they’re going to have trouble producing and selling it,” a buyer said on Tuesday. “I’m not sure what’s going to happen there.”

Furthermore, the US PET market is also dealing with more imports from South American producers who are looking to sell excess material, and lower-than-expected demand during the spring season due to oversupply.

Both issues add to the already-cautious sentiment in the US PET market.

(INSET IMAGE: Design Pics Inc/REX Shutterstock)