US chemical profile: PTA

Uses

Nearly all the output of purified terephthalic acid (PTA) is consumed in the production of polyester, including polyester fiber, polyethylene terephthalate (PET) bottle resin and polyester film. Other, smaller outlets for PTA are production of cyclohexanedimethanol, terephthaloyl chloride, copolyester-ether elastomers, plasticizers and liquid crystal polymers.

Supply/Demand

Some recent production issues appeared to have been ironed out as UK-based chemical major BP announced earlier this month that power to its Decatur, Alabama, plant in the US had been restored. Operations at the 1.1m tonne/year plant, where paraxylene (PX) and PTA are produced, were halted when a storm in late April cut power to the facility, although BP announced on May 5 it had not declared force majeure on PX production. The company said it does not expect disruptions to PTA production because of a lack of PX supply, as long as the unit restarts as planned.

Demand in North America is expected to continue to be impacted by a combination of PET bottle weight reduction and lost bottled water demand, both of which are expected to significantly reduce consumption of PET ­bottle resin per capita over the next few years.

Economic recovery and the conversion of further food packaging to PET will allow per capita consumption to return to 2007 levels by 2013, according to estimates by US ­consultancy CMAI.

Prices

There were no changes made to the assessed PTA contract price for April. The price remained at 71.50-71.80 cents/lb ($1,576-1,583/tonne, €1,056-1,061/tonne) DEL (delivered) during the week ended May 5, as assessed by ICIS. The April contract price represents an increase of 0.82-1.02 cents/lb over the March contract price of 70.68-70.78 cents/lb DEL.

Confirmation on upstream PX was received at 85.50 cents/lb DEL as the final contract price for April. The PX contract price is the basis for the formula-derived PTA price.

Technology

PTA was initially produced by the oxidation of PX using dilute nitric acid and, later, air. It was the first product to be made commercially using this process.

Modern technologies produce PTA by the catalytic liquid-phase oxidation of PX in acetic acid, which is done in the presence of air and uses manganese or cobalt acetate as a catalyst. PTA is purified in a crystallizer, where unreacted xylene and water are flashed off.

Technology for PTA has been led by BP and Turkish fibers producer Advansa. BP claims to have simplified the process, offering savings in capital and operating costs with the optimal plant size at 700,000 tonnes/year.

However, processes have also been developed by US-based companies Dow Chemical and Eastman Chemical, as well as Japan's Mitsubishi Chemical and Mitsui Chemicals.

Outlook

The outlook for PTA in the US is positive, as the polyester market is expected to benefit from a continuing economic recovery through 2012. Other factors positively influencing the polyester market are the further growth in the Central America Free Trade Act region, the improving housing market and polyester raw material parity between the US and Asia, according to UK-based consultancy PCI Xylenes & Polyester. 2010 was considered a strong year for polyester filament in particular, with 21% demand growth over 2009, according to the consultancy. All the major segments of this market - apparel, home furnishings, industrial and carpet - did well in 2010.

In that year, 157bn lbs (71m tonnes) were sold in the global textile market, with polyester fiber's market share at 47%. This is projected to increase to over 50% by 2015, according to US-based polyester and nylon textile filament manufacturer Unifi.

On the PET bottle resin side, the North American market has seen a combination of PET bottle weight reduction and lost bottled water demand, both of which are expected to significantly reduce consumption of PET bottle resin per capita over the next few years, which in turn will slow down the consumption of PTA in the PET bottle sector.

The global PTA industry faces the major challenge of growing overcapacity caused by huge capacity additions of nearly 9m tonnes/year under development, mainly in China.