PX Is in Short Supply

By John Zheng

Production and demand increased steadily in the world

In 2004, the capacity of PX (para-xylene) in the world was 24.801
million t/a, the output was 21.664 million tons and the operating
rate reached 87.4%. Asia was the largest production and
consumption region of PX and the output and consumption of PX
in Asia accounted for 62.3% and 66.9% of the world total in 2004.
North America and Western Europe came next.
     From 1999 to 2004, the production and consumption of PX in
the world increased at an average annual rate of 6%. The
companies in the Middle East utilized abundant oil resource to
construct many large petrochemical integrated units, the
average annual capacity and consumption growth of PX in that
region was therefore over 10%. At present, Asia is a major net
import region of PX, and North America and the Middle East are
the main net export regions. In the next 5 to 10 years, the newly
constructed PX units will be distributed in Asia and the Middle
East, the Middle East will be the region with the fastest
production and consumption growth, and Asia will still hold the
first place in the output and consumption of PX.

Consumption grew rapidly in China

The capacity of PX in China is more than 3.0 million t/a. The
output of PX was around 2.3 million tons in 2005, and the average
annual output growth of PX was 12.1% from 2000 to 2005.
     PX is mainly used to produce PTA (purified terephthalic
acid) and the dimethyl terephthalate. The consumption of PX in
PTA production accounts for around 85% of the total PX
consumption. The rapid development of the polyester industry and
the drastic expansion of the PTA consumption have led to a sharp
increase of the PX consumption.
    Because of the unduly rapid demand increase of PX, there is
a serious capacity and supply deficit in the domestic market,
and the import amount of PX in China has increased constantly
in recent years. In 2005, the import amount of PX reached 1.608
million tons, an increase of 41.4% over 2004, and the consumption
was 3.846 million tons, a rise of 29.3%.

Capacity increased rapidly in China

Because of the serious supply deficit of PX in domestic market,
a large number of domestic companies have accelerated the
construction of PX project, and foreign companies have also
constructed PX plants in China.
    Major domestic PX producers have both aromatic units and
ethylene cracking units. Ethylene is also one of the basic
organic materials with supply deficit in China. It is hard to
avoid the competition between aromatic unit and ethylene
cracking unit for naphtha. The operating rate of aromatic units
will probably be affected due to insufficient materials.
Therefore naphtha availability should be taken into
consideration in launching PX projects.
    It is expected that the capacity of PX in China will reach
10 million t/a in 2010, the market supply deficit will be more
than 2.5 million tons at that time, and China will become a major
country with supply deficit of PX in the world.

Price will maintain at high level

The oil price in the international market has increased
constantly in recent years, and the price of PX is closely
related to the oil price. The average annual PX price in China
was RMB4 638/t for 2002, RMB5 701 for 2003, RMB6 950 for 2004,
and RMB7 600 for 2005. At present, the ex-factory price of PX
in China has increased from RMB8 500/t at the beginning of 2006
to RMB12 500/t.
    It is expected that oil prices will maintain at high level
in the next few years, if there is no significant demand decrease
of the PX caused by the global economic downturn, the price of
PX will change synchronously with oil prices and continue to
remain at a high level.  

Table 1 Major PX Producers in China in 2005
  (thousand t/a)
Producer                          Capacity
Sinopec Yangzi Petrochemical Co.    550
Sinopec Zhenhai Refining and Chemical Co.    650
CNPC Liaoyang Petrochemical Co.    700
Sinopec Tianjin Petrochemical Co.    330
Sinopec Luoyang Petrochemical Co.    210
Sinopec Shanghai Petrochemical Co.    235
Sinopec Qilu Petrochemical Co.    65
CNPC Urumqi Petrochemical Co.    80   
Source: CNCIC Chemdata

Table 2 Supply and Demand of PX in China
               in Recent Years             (thousand tons)
Year    Output    Net import    Apparent consumption   
2000    1 301     183    1 484             
2001    1 454     110    1 564              
2002    1 484     240    1 724                  
2003    1 570     930    2 500                 
2004    1 870     1 104    2 974                 
2005    2 300     1 546    3 846
Source: CNCIC Chemdata