China Market Insider New PTA Production Plant into Operation
Hengli Petrochemical started up the world's largest stand-alone pure terephthalic acid (PTA) production plant at the end of June. According to PROCESS China, the new PTA-5 plant has an annual capacity of 2.5 million tons and is ready to be the third new plant to be started up in China this year.
Beijing/China – Private petrochemical companies in China are currently massively expanding their PTA capacity. If all other projects announced for the rest of the year go on stream as planned, China's total PTA capacity will grow to 69.53 million tonnes per year in 2020. This represents an increase of 32.6 %.
Before Hengli Petrochemical started up its giant PTA plant on 29 June, two other new Chinese plants had already been commissioned this year: a new PTA plant from Zhongtai Petrochemical for 1.2 million tons per year and another one from Hengli Petrochemical for 2.5 million tons per year.
Thus, in the first half of the year alone, 6.2 million new PTA capacity entered the Chinese market, which represents 11.8% of the total capacity of the previous year. Foreign market observers are already warning whether all this new PTA will find buyers, especially since the global chemical market is currently acting rather listlessly, even in Corona.
Hardly any new refinery network in China is currently being built without a connected PTA plant. But the downstream PET capacity is not growing nearly as fast as statistics and forecasts from experts suggest. The consulting firm JLC estimates the total PTA capacity for the current year in China at almost 70 million tons. The expected demand for the chemical intermediate, on the other hand, is estimated at only 46 million tonnes.
In the second half of the year, further PTA plants are to be added, for example from Fujian Baihong, Xinjiang Lanshan Tunhe, Honggang Petrochemical and Ningbo Yisheng, or as part of fengming projects. These projects will add a further 17.1 million tonnes of PTA capacity from China by the end of the year.
It is currently difficult to predict whether the forecasts of overcapacity will be accurate or not. However, the strong concentration on this product will undoubtedly intensify competition. In order to remain successful in the market, companies will have to produce more cost-effectively in the future.
Hengli Petrochemical's giant PTA plant, which has just started up, uses the Invista P8 technology of the American Dupont-ICI group. Using oxidation and hydro-refining, pure terephthalic acid is produced in a two-step process. The process is becoming increasingly popular in China. Out of 21 PTA plants built in China over the past ten years, ten are running Invista processes.