Updated to mid-November 2009
Asian market review by Jeremiah Chan, ICIS pricing
The Asian purified terephthalic acid (PTA) market began to slide from mid-August, as prices earlier at $915-930/tonne CFR (cost and freight) China slumped as sellers dumped cargoes amid expectations that the market would crash after the Chinese holidays in early-October.
By late-September, PTA values hovered at $780-790/tonne CFR China as market players, fearful of being stuck with higher-priced inventories, emptied their inventories or took short positions. This quickly backfired, however, as prices quickly rebounded on an unexpected recovery in demand from the downstream polyesters sector.
This subsequently led to prices rising above $850/tonne CFR China by late-October, exacerbated by increasing feedstock paraxylene (PX) values. By mid-November, PTA had regained its earlier losses and was trading at $920-930/tonne CFR CMP (China Main Port).
European market review by Caroline Howard, ICIS pricing
European PTA August contract prices moved up by €21/tonne to €703-731/tonne FD (free delivered) NWE (northwest Europe) from July because of higher production costs.
European producers, of which there were only two majors, had been trying to widen the gap over upstream PX, and in some cases they found success by up to €10/tonne. Some accounts witnessed a rollover of the PX pass-through. PX was agreed up €32/tonne to €760/tonne.
By September, PX rolled over and there were reports of €5-10/tonne coming off the PX pass-through cost for PTA. This was apparently caused by exchange rate issues at the time of the deals allowing for competition from Asian material.
Discussions for October PTA prices were still open in November. The €145/tonne drop in October PX prices could equate to a fall of €97/tonne on PTA, using traditional formulae.
US market review by Landon Feller, ICIS pricing
PTA contracts were flat in the US from August to September at an average price of $1,037/tonne, but fell by 12% in October as feedstock PX values plummeted.
The polyester feedstock experienced soft demand stemming from flat-to-negative growth and the closure of polyester capacity in the US and Canada. North American producer Invista’s closure of polyethylene terephthalate (PET) capacity in Canada resulted in 100% of Canada’s domestic PTA production being pushed into export markets, mainly the US.
PX prices were again on the rise by late October and looked set to see contract price hikes in November. The fourth-quarter upswing was buoyed by firm energy prices, this despite adequate supply and weak demand.
October was the last month for which contracts had settled by press time, and was priced at an average of $910/tonne.
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Terephthalic acid
Uses and Outlook
Nearly all purified terephthalic acid (PTA) is consumed in polyester production including polyester fibre, polyethylene terephthalate (PET) bottle resin and polyester film. For most grades of polyester used in textiles and food and beverage containers, it is more economical to use PTA than the alternative dimethyl terephthalate (DMT) intermediate.
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Terephthalic acid
Process Technologies
Terephthalic acid was first produced commercially by the oxidation of paraxylene (PX) using dilute nitric acid and, later, air. These older processes provided impure terephthalic acid and purification was achieved via esterification to dimethyl terephthalate (DMT).
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