SpecialReport Phthalic Anhydride: A Techno-Commercial Profile Part 2: International Scenario PANKAJ DUTIA E-mail:
[email protected] Global capacity The total global capacity for phthalic anhydride (PAN) is estimated to be about 4.16-mtpa in 2007, of which 28% is in the Europe, 22% in the US, 49% in Asia region and the balance 1% in the Middle East. Within Asia, China has 13% of total capacity, followed by Korea, (9%), India (6%) and Japan (8%).Total production in 2007 is estimated at 3.65-mt, indicating a capacity utilisation of 88% during the year. Aekyung Petrochemicals and DC Petrochemical in Korea, Taiwan Oil and Nan Ya Plastics in Taiwan, IG Petro and Thirumalai Chemicals in India, BASF in Germany, Exxon Mobil, Sunoco, Stepan, Sterling Chemicals and Koppers Industries in the US are the leading players having capacities of above 100,000-tpa. These 12 companies together constitute 36% of total capacity. Recent developments BASF closed its plant at Feluy, Belgium, in 2005. In May 2006, Krasitel restarted its plant after a years outage. Kemiplas Hungarian plant restarted in Jan 2007 following a nine-month outage after a catalyst change. Lonza has put its polymer intermediates business into new entity, Polynt. In China recently, Zhejiang Qingan Chemical Industry Co., Ltd. (Zhejiang Qingan) commenced trial run on its 50,000-tpa PAN and DOP (dioctyl phthalate) project in Jiaxing, Zhejiang province. Both projects have entered the commercial operation stage. Zhejiang Qingan is jointly established by Henan Qingan Chemical High-tech Co., Ltd. and North America Wealth International Trade (Group) Co., Ltd. Henan Qingan Chemical High-tech Co., Ltd. is engaged in plasticizer and PAN production, with annual capacity of 100 000-tpa for plasticizers and 600,000-tpa for PAN. After completion, the two projects will help the company increase its sales revenue by RMB1-bn per year. Table 1 Regional share of the global capacity Region Share [%] Europe USA Middle East & Africa Asia w China w Korea w India w Japan w Other Asian countries 28 22 1 49 13 9 6 8 13 Total [4.16-mtpa] 100 Technology The route via o-xylene (OX) has played a dominant role and has largely superseded naphthalene-based technology, which accounts for about 16% of production. OX is catalytically oxidised in a fixed-bed reactor and the reactor effluent containing PAN vapours is cooled and sublimated in condensers. The crude PAN is purified in a vacuum distillation system and the product is either stored in a molten state or bagged as flakes. There has been little change in process technology, although research continues to focus on catalyst improvements. One development has been the lowering of air to OX weight ratio, which is now 9.5:1, and allows lower capital costs and energy savings. Demand trends World consumption of PAN was more than 3.5-mt in 2006. Global capacity uti- Table 2 Phthalic anhydride capacity in North & South America [Kilotons per year] Company Location North America ExxonMobil Chemical Sunoco Stepan Sterling Chemicals BASF Koppers Industries Mexico Baton Rouge, LA Pasadena, TX Millsdale, IL Texas City, TX Cicero, IL South America Argentina Brazil Chile Columbia Venezuela Capacity 667 145 130 108 104 100 80 254 40 135 10 23 46 Chemical Weekly January 8, 2008 191 191 Special Report Table 3 Phthalic anhydride capacity in Europe [Kilotons per year] Company Location Angarsk Petrochemical Arkema Atmosa Petrochemie Avdeevsky Koksokhimichesky Zavod BASF Cepsa Destilacija Teslic Deza ExxonMobil JSC Ural Chemical Kemiplas Angarsk, Russia Chauny, France Schwechat, Austria Avdeevka, Ukraine Ludwigshafen, Germany Algeciras, Spain Teslic, Bosnia-Herzegovina Valasske Me Botlek, Netherlands Nizhnly Tagil, Russia Fuzfogyartelep, Hungary Koper, Slovenia Rubezhansk, Ukraine Lida, Belarus Krefeid, Germany Rimnicu, Vilcea, Romania Ruse, Bulgaria Nol, Sweden Brazi, Romania Omsk, Russia San Giovanni Valdarno, Italy Scanzorosciate, Italy Ostend, Belgium Salavat, Russia Bratislava, Slovakia Perm, Russia Zelzate, Belgium Novokuznetsk, Russia Kedzierzyn, Poland Krasitel Lakokraska Lanxess Oitchim Orgachim Perstorp Oxo Petrobrazi Polymer Pack Polynt ProvironFtal Salavatnefteorgsintez Slovnaft Uralkhimprom VFT Belgium West-Siberian Steel ZA Kedzierzyn Capacity 15 90 50 25 110 30 16 75 7 20 32 25 26 85 20 20 35 35 40 30 80 100 15 40 75 20 10 24 Total lization was slightly higher in 2006 than in the previous year, because of a slower pace of capacity expansions and moderate world demand. Between 2003 and 2006, world capacity for PAN grew at an average annual rate of 1.5%, trailing world consumption. Increased demand in some regions, mainly Asia, was balanced by moderate demand in the United States and Western Europe and weak demand in Japan. The largest net importing region for 1185 Other Unsaturated Polyester Resins Plasticizers Alkyd Resins Figure 1: End-use applications for PAN PAN is Southeast Asia; China is the largest importing country. The largest exporting countries are Taiwan, India and the Republic of Korea. Plasticizers account for the majority of world consumption of PAN (57%), followed by alkyd resins and unsaturated polyester resins (UPR) at 16% and 17% respectively. Other smaller-volume applications include polyester polyols, saccharin, pigments, dyes and flame retardants, which together account for the balance 10%. Demand for most downstream markets for PAN is greatly influenced by general economic conditions. As a result, demand for PAN largely follows the patterns of the leading world economies. Consumption of PAN depends heavily on construction/remodeling activity (residential and non-residential), automotive production and original equipment manufacture (OEM). During 2003-06, global consumption of phthalic anhydride grew by 2.3% annually. During this period, global demand was propelled by strong demand in Asia for all its applications. Global demand is forecast to grow at a CAGR of 2.9% during 2006-11 with a growth of 3.5-3.6% in Asia Pacific, 1.5-2.0% in the US and 1.0% in Western Europe. While demand growth will be moderate in the US and marginal in Western Europe, it will be driven by the plasticisers and unsaturated polyester resins segments in Asia. Continuing rapid demand growth in some regions, particularly in Asia (excluding Japan), mainly for plasticizers and UPR, will balance out moderate growth in some markets, such as the United States, and marginal growth in Western Europe. Weakening demand for PAN in plasticizers and negative growth for alkyd resins are the main factors behind slower demand in the United States and Western Europe. Chemical Weekly January 8, 2008 192 192 Special Table 4 Phthalic anhydride capacity in Asia, Middle East & Africa [Kilotons per year] Company Middle East Africa South Africa Asia-Pacific China India IG Petrochemicals Thirumalai Chemicals Ltd. Asian Paints Ltd. Schenectady Herdillia Ltd. Mysore petrochemicals Indonesia Petrowidada Japan Japan Phthalic Kawasaki Kasei Nippon Steel Chemical Nippon Steel Chemical Nippon Shokubai Kawasaki Steel Korea Aekyung Petrochemical DC Petrochemical LG Petrochemical Others Malaysia Philippines Taiwan Taiwan Oil Nan Ya Plastics Union Petrochemical Union Petrochemical Location Capacity 40 14 14 2004 540 Maharashtra Tamil Nadu Gujarat Maharashtra Karnataka 120 100 25 10 12 70 Mizushima Kawasaki Kitakyushu Sakai Hieji Chiba 80 80 44 34 44 40 Ulsan Pohang Yeochon 180 155 50 10 50 20 BASF Petronas Hsien-Hsi Hsiang Mailiao Linyuan Taipei Price trends PAN prices generally fall in line with the price of its feedstock OX. Over the last six years PAN prices have gone up from US$620 per ton in 2002-03 to US$1190 per ton in 2006-07 and are expected to touch around US$1,300 per ton in 2007-08 due to robust demand for PAN and spiraling prices of OX. Recently, PAN prices in Southeast 130 100 80 30 Asia were on a downtrend, in line with OX prices. PAN prices dropped 12.6% to $1,190-1,220 per ton CFR (cost and freight) SE Asia in November 2007. PAN prices in China were also on a downtrend, reflecting price drops in domestic Chinese prices. Volumes to China continued to be limited, due to the wide price gap between imports and domestic cargoes. Chemical Weekly January 8, 2008 Report Table 5 Phthalic anhydride: Price trends [US$ per ton] Year Price 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08E 620 600 900 900 1,190 1,300 The European PAN market was extremely tight in August 2007 as a result of planned and unplanned shutdowns both in August and the preceding months. Contract prices fell despite the tight conditions as feedstock OX shed Euro 67 per ton, but freely negotiated contracts did not follow the full OX movement. In September, the market recovered very quickly and with the majority of lost production back onstream, prices in both the spot and contract markets fell dramatically as OX continued its swift descent. The downward trend continued through October and while contract prices were now more or less moving in line with the upstream market, a substantial volume of imported material put the spot flake market under considerable pressure. Downward pressure was still evident in early November as OX prices were still trending down and cheap offers for flaked material were still on offer. US PAN (molten) prices in November were at 57.50-62.50 cents/lb (US$1,268-1,378 per ton), down by 5.50 cents/lb from August, due to a softening in feedstock OX prices. PAN demand is expected to drop in the fourth quarter amid a seasonal slowdown in downstream markets. PAN consumption has already softened in the alkyd paint and unsaturated polyester resin sectors, while consumption in the plasticiser segment is expected to slow down. 193 193