China’s Next Target: Paraxylene Self-Sufficiency?

China, Company Strategy, Economics, Fibre Intermediates

One day a thing of the past

By John Richardson

ONLY a few years ago, people were discussing the great opportunities in purified terephthalic acid (PTA) as a globally traded product. I can remember confident talk of strong opportunities for export-based projects – especially, of course, projects that targeted the key China market.

And yet, remarkably, during the first day of the  2nd ICIS Asian PET and Polyester Conference, which is taking place in Singapore on 13-14 November, several delegates said that:

  • PTA will will mainly become a “local for local product” – i.e. international trade in the fibre intermediate will be greatly diminished.
  • Uncompetitive plants that were built to serve export markets will therefore face pressure to shut down.
  • Those plants that are based on imported paraxylene (PX) to make PTA which is then aimed at export markets will be especially vulnerable.
  • Driving this potential turnaround in markets is China, which is moving towards complete self-sufficiency in PTA.

The question would then become “what happens to PX?” Some delegates thought that it was only a matter of time before China became self-sufficient in PX also, whereas other attendees argued that China didn’t have the feedstock availability to achieve this.

“Refinery expansions in China are aimed at gasoline and diesel markets  rather than PX and, anyway, there is a great deal of what I would describe as irrational environmental pressure against PX capacity additions in China, But it doesn’t matter if it is irrational as sentiment counts,” said one delegate.

He was referring to  recent protests against new PX plants that have led to some projects being shelved.

But  China will do what suits China, and so it would be wrong to altogether rule out the possibility that one day it might also become self-sufficient in PX.

Here is how this might work:

  • Chinese investors take stakes in US shale gas fields and export condensates from these fields to China and/or US shale gas operators sell condensates to China on favourable terms. Condensates supply is, for the time being, very long in the US. These condensates can be split into heavy naphtha to be put through a reformer to make mixed xylenes and toluene – the feedstocks for PX.
  • This would mirror what is happening in methanol, where Chinese investors are taking stakes in methanol plants in the US. The methanol is scheduled to be shipped to coastal methanol-to-olefins projects in China.

Far-fetched and doesn’t make economic sense? Completely off the wall?

Maybe, but no chemicals or polymer is safe today from losing its position as an internationally traded product because of China’s determination to protect employment.

China might thus find other ways to achieve PX self-sufficiency.

Here is another suggestion. Perhaps this self-sufficiency will come via the methanol-to-PX process. Shanxi Coal Chemical Group and China Huadian Corp each have what we are told are “experimental plants” making PX from coal-based locally produced methanol.

We are told that this technology is yet to be proven and that it could be an expensive process.

But if this is the right strategic fit for China, this technology will be made to work.

And here’s the thing:

  • These methanol-to-PX plants are likely to be inland, near to coal mines that will supply them with their raw materials.
  • They might thus fall into the same category of coal-to-olefins (CTO) investments, which are viewed by the government as a means of creating jobs in China’s less developed provinces.

In the case of CTO, I am becoming more and more convinced that lots of these plants will be built – and will be run hard, regardless of their standard cost-per-tonne economics.

The global PX industry must, as a result, prepare a contingency plan for China becoming an ex-import market.


Saudi Arabia Can Withstand Years Of Lower Oil Prices


By John Richardson QUITE a common argument out there is that if and when higher ...

Learn more

Abenomics Are Wrong For Japan And The World


  By John Richardson TEN years, a Japanese contact told me, “When we even...

Learn more
More posts
Global polyethylene oversupply, the highest in 19 years, hasn’t gone away

By John Richardson BRENT crude futures surged by 80% during the second quarter and enjoyed their bes...

China could be in complete polypropylene self-sufficiency by 2022

By John Richardson SORRY to labour the point but this comes from a genuine concern for the readers o...

Asian polyethylene price recovery faces multiple challenges

By John Richardson THERE are reports of significant cuts in Middle East polyethylene (PE) operating ...

China’s long-term ambition for paraxylene self-sufficiency seems close to being realised

On Friday, I examined how China’s paraxylene (PX) net imports could fall to as little 8m tonne...

China’s big declines in 2020 PX and PP imports: the impact on its major trading partners

By John Richardson CHINA’S refineries and petrochemicals plants came roaring back to almost fu...

Paraxylene demand collapses as higher China production threatens 6m tonne fall in imports

By John Richardson DON’T SAY I didn’t tell you that a decline in stock markets would happen. The...

Coronavirus will severely damage the developing world unless we take the right steps

By John Richardson IT IS a fantastic achievement. “Over the last 25 years, more than a billion peo...

Main Street versus Wall Street and the crisis in the developing world

By John Richardson RISING equity and oil markets do not necessarily point to a V-shaped recovery. I ...


Market Intelligence

ICIS provides market intelligence that help businesses in the energy, petrochemical and fertilizer industries.

Learn more


Across the globe, ICIS consultants provide detailed analysis and forecasting for the petrochemical, energy and fertilizer markets.

Learn more

Specialist Services

Find out more about how our specialist consulting services, events, conferences and training courses can help your teams.

Learn more

ICIS Insight

From our news service to our thought-leadership content, ICIS experts bring you the latest news and insight, when you need it.

Learn more