According to IHS Chemical ‘s latest research report “World of paraxylene 2014 analysis ,” said for China purified terephthalic acid (PTA) market a new round of paraxylene (PX) expansion in South Korea in full swing , but the market demand difficult to synchronize the rapid growth, coupled with the Middle East and Southeast Asia will also put some of the new PX production capacity, the world will increase the degree of excess PX . PX industry will face in the future operating rates and margins as well as a new round of restructuring , outdated equipment and less competitive device will have to close .
South Korea can do to double production
IHS Chemical fibers and raw materials for Asian businesses Ashish Pujari manager, said: ” I think it will be a serious excess supply capacity PX although historically, the operating rate of the Korean PX devices have been more than 100% , taking into account the PX production capacity over the next five years . will greatly enhance the operating rate forecast accordingly PX devices will significantly reduce . ”
Korea PX substantial expansion began in 2013 . HC Korea Petrochemical Company commissioned a year in the mountains a 800,000 tons / year PX unit . This year , Samsung Total , SK Global Chemical and SK JX Japanese companies totaled 3.3 million tons / year PX production capacity production. GSC Sun 2015 will be put into operation in Lishui, a one million tons / year plant . Overall, these projects will enable the PX production capacity in Korea nearly doubled in four years , from 2012 ‘s 5.3 million tons / year in 2016 to 1050 fast tons / year .
South Korean petrochemical companies and large the PX project is mainly taken into account: continued weakness in the global economy caused by weak refining profit margin , production of petrochemical products can increase profitability. Pujari analysis pointed out that , from a global point of view, refiners want to increase the proportion of petrochemical products to offset the decline in gasoline demand in the coming years due to the expected earnings decline.
In fact , South Korea in which the implementation of these projects PX also encountered a number of obstacles . SK Global Company in August 2012 began construction of 1.3 million tons in Incheon / year PX plant , the local residents have been subjected to strong protests . To January of this year, 90% of the project has been completed . In February 4th fourth quarter earnings conference , its parent company SK Innovation said the project will be completed on schedule.
SK JX Japanese companies in Ulsan projects and GSC Sun Yeosu project faces is related to legal issues. Both are joint ventures , the former is SK Global and JX Nippon Oil joint venture , which is a joint venture with Japan’s Showa Shell GS Caltex oil between oil and solar . Although these projects have been carried out for several years , but because of South Korea’s ” Foreign Investment Promotion Law,” ownership issues have not been resolved. This law passed in 1998 prohibits subsidiary share ownership . SK Global is a subsidiary of SK Innovation , GS Caltex is a subsidiary of GS Group , belong to the limits of the law . However , last month, the bill has been amended to allow partners to hold a maximum 50% stake in the project .
Expanding energy demand from China
Pujari pointed out that when these producers had plans to build more than the PX , PX demand growth in Northeast Asia is growing very fast , mainly due to strong market growth stimulation polyester . IHS Chemical data show that from 2008 to 2013 , PX demand in Northeast Asia nearly 9% average annual growth rate in the region during the PX market new demand 7,000,000 tons , reaching 21 million tons / year. New demand mainly from China . China as a big consumer of polyester , from 2008 to 2013 added nearly 11 million tons of polyester demand / year, total global demand additional 2 /3. Especially in 2010 and 2011 demand is very hot, then soaring cotton prices , cotton and polyester are the most economical and suitable alternative.
At the same time , China has decided to increase the local production of polyester and PTA feedstock to reduce dependence on imported goods. From 2008 to 2013 , China added 16 million tons of polyester capacity / year, total capacity of 36 million tons / year , an increase of 80%, while other countries in Northeast Asia over the same period only new polyester capacity 1 5 – tons / year. Meanwhile, the Chinese new PTA production capacity 21 million tons / year, total capacity of 33 million tons / year , an increase of up to 170 %. The other countries in Northeast Asia PTA production capacity is reduced by about 1 million tons / year PTA production capacity elsewhere in the world have only added
300 tons / year.
But China PX capacity expansion rate is relatively slow , from 2008 to 2013 , China added PX production capacity is only 5.6 million tons / year ; while Chinese demand for raw materials to satisfy the new PTA plant requires supporting PX capacity of 13 million tons / year . Huge gap between demand and capacity resulted Chinese PX imports increased nearly three -fold during the period , reaching 8.5 million tons / year, which is to promote the Korean manufacturer PX expansion boom set off round the driving force .
It is predicted that China PX imports will continue to grow . IHS Chemical Company expects 2014 China PX production capacity to more than 2 million tons / year, but by 2018 there will be no new projects , projected to 2018 Chinese PX imports will reach 13 million tons .
Industrial restructuring is difficult to avoid
Pujari said, by slowing economic growth and a slowdown in demand growth in China led to a lot of new capacity coming on stream of influence , the next few years China’s import demand for PX appeared impossible a few years ago such a rapid growth. In addition, Korea is not the wish to increase trade on China the only country PX . In Southeast Asia, three PX devices are under construction. Jurong Island, Singapore Aromatics Company is a new set of 80 tons / year PX unit is expected by mid-2014 production. Vietnam Nghi Son is a new set of 350,000 tons / year PX unit , is expected to put into operation in 2017 . Heng Yi Sinopec announced a new oil refinery in Brunei and a 150 tons / year PX unit , is expected to put into operation in 2016 . In addition , there are more projects are being assessed .
In addition, there are a lot of Middle East PX projects are being implemented . In Saudi Arabia, will add 4.6 million tons by 2018 / year PX production capacity. Saudi Aramco Total Refining and Chemical Company located in Jubail set of 700,000 tons / year PX unit will be put into operation this year. Rabigh Rabigh Refining and Chemical Company is located in a set of 1.35 million tons / year PX unit and the extension of Bua US Sinopec Yanbu refinery located in a 700,000 tons / year PX unit will be commissioned in 2016. Saudi Aramco in Las Nura set 1.2 million tons / year PX unit will be commissioned in 2017 , is located in Jizan set of 650,000 tons / year PX unit will be commissioned in 2018 .
According to IHS , said the global PX total production capacity expected to grow from 2013 ‘s 41 million tons / year increase to nearly 60 million tons / year in 2018 when , but rationalization of production capacity should be increased to reduce the actual amount . Means the average level of capacity utilization resulting overcapacity is expected to decline to make nearly 350 million tons / year production capacity out of the market of old . Some of Japan ‘s export- old PX devices are most likely to be out of the market .
Pujari said that in the past few years , due to the shortage of market supply , Korea and other countries continue to drive up the PX said supply prices , resulting in high prices in the international market , the industry profitable , with Asian PX producers operation is better than North America and Europe competitors. However , over the next five years with new capacity coming on stream in the region , the Asian manufacturer’s profit golden period or will end , or even a loss, because from the current point of view , the Asian PX market has signs of excess supply . According to IHS Chemical Company , said the past year , the Asian PX prices fluctuate mainly due to excess supply and the impact of weak market demand , rather than the upstream crude oil and naphtha affected by market fluctuations .(http://www.lubonchem.com supply)
