HOUSTON (ICIS)--A fire that broke out on Sunday at Alpek's (Petrotemex) 1m tonne/year purified terephthalic acid (PTA) plant in Altamira, Mexico is expected to further disrupt the already-tight downstream polyethylene terephthalate (PET) markets in the Americas.
Alpek said the fire was in a section of the plant and was promptly controlled. It is unclear whether the fire affected both units at the site, which produce 500,000 tonnes/year each.
Neither the fire's cause nor the extent of the damage is known. Alpek said it is working to determine required repairs.
Market participants expect some loss of PTA production and the consequent impact on the downstream PET market, which has been pressured since last year amid the financial problems and asset sales of producer Mossi & Ghisolfi (M&G) that resulted in reduced production of PET in the Americas.
While the exact loss of PTA stemming from the fire is unknown, the impact is expected to be felt downstream to some extent. Initial reactions varied, but sources said there was cause for concern, especially given tight market conditions.
The plant supplies a number of PET resin plants in the Americas: the nearby M&G plant, DAK Americas' Pearl River site in Mississippi and various other plants in Mexico and South America. It also exports to European polyester producers.
“There was significant damage that will have far-reaching effects on the market," a US source said. "It’s peak demand season, so it’s an unfortunate time for buyers.”
Another participant said it caused concern, but was not yet sure if the impact would be significant in PET markets.
"It’s going to cause disruption, it’s going to cause noise, but this is nothing close to M&G shutting plants and declaring bankruptcy," the source said. "There’s no PET plant down."
M&G's bankruptcy tightened PET markets throughout the Americas, as plants either shut down or reduced operating rates, creating significant resin insecurity.
M&G's assets have now changed hands, with Far Eastern New Century (FENC) starting up the shuttered resin plant in Apple Grove, West Virginia this month and Indorama taking the reins in Brazil.
While resin supply is normalising to some extent with production resumed, uncertainty persists, especially for those without solid contracts in place.
North American markets are still experiencing peak-season demand, while demand is tapering in South American markets as winter weather approaches.
More details are expected to surface in the short term.
Focus article by Amanda Hay
Additional reporting by George Martin
Pictured above is Alpek's (Petrotemex) plant site in Altamira, Mexico. (Photo by Alpek)