Paraxylene (PX) is the largest volume isomer of the mixed xylenes. Around 98% of PX is consumed in the polyester chain, mainly in the production of fibre, film and polyethylene terephthalate (PET) bottle resins, via one of two intermediates – purified terephthalic acid (PTA) or dimethyl terephthalate (DMT). A small amount of PX is used as a solvent and to produce di-paraxylene and herbicides.
The PX market has seen strong growth driven by increasing PTA consumption in polyester manufacture. DMT demand is declining slowly as polyester manufacturers prefer the more economical PTA route although DMT demand is growing in the production of engineering polymers such as polybutylene terephthalate.
In Asia, much of the growth in polyester is for fibre, which accounts for nearly two-thirds of global demand. It is used to make fabrics for apparel and home furnishings such as bed sheets, bedspreads, curtains and draperies. Polyester fibres are also spun together with natural fibres such as cotton to produce a cloth with improved properties such as wrinkle resistance. In North America and Europe, polyester fibre production has been stagnant or even declining as the textile industry has migrated to Asia.
However, this decline has been compensated by the strong growth in the PET bottle resin market, which now accounts for just over 30% of global polyester demand. The growth has come mainly from the replacement of glass in soft drink and mineral water bottles. PET has also found applications in more niche markets such as sports drinks, fruit juices and food products such as oils, sauces and dressings. However, beer packaging is largely an untapped market for PET with the main penetration only in eastern and central Europe, in particular Russia.
Global PX markets have been tight through 2006 and into 2007. In this period, PX utilisation rates have been very high at above 90%, according to UK-based consultants Tecnon OrbiChem. Asian markets have been particularly tight with demand exceeding supply.
Global demand for PX has been growing strongly and this is expected to continue. Tecnon OrbiChem expects world consumption to grow at an average of 7%/year in the 2008-2013 period. Growth in Asia is higher at an average of 8.5%/year in the same period, driven by China.
Despite this strong demand growth, a world surplus in capacity is expected to start to appear in mid-2008 leading to a significant surplus in 2010. The key growth areas in production will be the Middle East and Asia, in particular China.
According to Tecnon OrbiChem, the additions planned in these regions amount to 1.6m tonnes/year in 2007, 2.5m tonnes/year in 2008 and a huge 6.4m tonnes/year in 2009. By 2010, the surplus in PX capacity could be 8m tonnes/year. However, the move towards oversupply could be tempered by projects taking longer to develop than planned or not coming to fruition at all.
Despite the huge increase in capacity in China – from 2.3m tonnes/year in 2003 to 11m tonnes/year in 2013 – it will remain a significant net importer over the next five years due to insufficient PX capacity to cover PTA capacity.
The Middle East, on the other hand, will have growth in PX capacity well in excess of PTA capacity as a result of new export-orientated refinery projects. It is set to become a major exporter with China a target market. At the same time, North American exports to China are expected to become less significant.
Demand growth in the US is predicted to be slower at 3.2%/year to 2010. According to ICB, US consumption will increase from 3.44m tonnes in 2006 to 3.90m tonnes in 2010. Imports in 2006 were 1.13m tonnes while exports were 918,000 tonnes.
PX demand is highly correlated to the polyester market which has seen mixed fortunes in the US in recent years, depending on the segment. However, the polyester market has been performing better more recently.
Fibre sales for polyester filament producers have been improving with growing use in the automotive sector. Polyester staple producers report higher capacity utilisation rates with the fibrefill and nonwoven sectors performing the strongest. There has also been an improvement in the apparel segment for staple. The best performance has been the PET bottle resin market with demand growth of 6%/year.
Phase out of methyl tertiary butyl ether (MTBE) in the US as an oxygenate in gasoline could affect the availability and price of PX. The replacement of MTBE with ethanol in the gasoline pool has resulted in a need to find alternatives to boost octane values. A solution is to increase the aromatics fraction with higher gasoline blend values pulling xylenes from chemical applications.
(Updated: November 2007. Sources: The 6th European Aromatics & Derivatives Conference, 14-15 November 2007, Amsterdam; ICB Chemical Profile, 18 June 2007.)