Introduction: As of the end of 2016, my country has long-term shutdown of 16 PTA units, with a total production capacity of 14.08 million tons/year; other regions in Northeast Asia have long-term shutdown of 11 PTA units, involving a total production capacity of 3.38 million tons/year.
Although these idle production capacities do not directly participate in market competition, it is difficult to completely withdraw from the market in the short term and become a “barrier lake” in my country’s PTA industry. Once the market supply and demand situation and profit margins improve slightly, these production capacities may soon restart and enter the market, causing the market to return to a state of oversupply and profit margins narrowing again. The “barrier lake” effect formed by idle production capacity has, to a large extent, restricted the overall profitability of the PTA industry.
Far East Petrochemical PTA’s fourth production unit with an annual output of 1.2 million tons, one of the four former Chinese PTA giants, has resumed trial production
On the afternoon of October 17, with the “ignition” order, the fourth production unit of the original Far East Petrochemical PTA with an annual output of 1.2 million tons was slowly started. This marked the successful reorganization of the former leading domestic PTA company after the takeover of Shaoxing Huabin Petrochemical Co., Ltd. Entering the stage of resuming production and achieving nirvana and rebirth.
At about 2:00 pm on the 17th, Shaoxing Huabin Petrochemical Co., Ltd. located in Binhai Industrial Zone successfully commissioned. This marks that the idle production capacity of the original Far East Petrochemical has been effectively activated.
Affected by factors such as the severe macroeconomic situation and the industry downturn, Far East Petrochemical declared bankruptcy in July 2015. After Reignwood Group took over the entire assets of the former Far East Petrochemical through a judicial auction in October 2016, it worked non-stop to resume production and operations, which took only one year.
“There were originally four PTA production lines. This time, one of the more advanced production lines was put into operation. After reaching full capacity, the annual output value will reach 8 to 10 billion yuan.” Xiao Min, general manager of Shaoxing Huabin Petrochemical Co., Ltd. said, ” Next, we will accelerate the elimination of the remaining three relatively backward production lines, strengthen in-depth cooperation with Sinopec, and plan to invest 5 billion yuan in a new technologically advanced PTA project with an annual output of 2.2 million tons. By then, the company is expected to achieve an annual output value of 28 billion yuan, providing a Make positive contributions to the economic development of Keqiao and even Shaoxing.”
Xianglu Petrochemical’s original 1.5 million tons/year PTA project capacity has been changed to 4.5 million tons/year
On September 28, the Fujian Environmental Protection Department made an online public announcement of the environmental impact assessment approval opinions on the “Production Capacity Change of Purified Terephthalic Acid (PTA) Project of Xianglu Petrochemical (Zhangzhou) Co., Ltd.”
The project construction site is located in the petrochemical start-up area of Gulei Economic Development Zone, Zhangzhou, Fujian, and the construction unit is Xianglu Petrochemical (Zhangzhou) Co., Ltd.
Comparison with the main construction content of the project before the change: the PTA production scale was changed from 1.5 million tons/year to 4.5 million tons/year, the oxidation reactor was increased from 2 (small) to 3 (large), and 1 high-pressure absorption tower was increased to 3 units, 1 atmospheric pressure absorption tower increased to 2 units, 2 sets of main process air compressor systems (small) were increased to 3 sets (large), 1 hydrogenation reactor was increased to 2 units, and 1 PTA dryer was increased to 3 sets, 4 sets of PTA pressure filters increased to 9 sets, and corresponding supporting adjustments were made to public auxiliary projects and environmental protection projects. The total project investment increased from 4,967.01 million yuan before the change to 7,551.25 million yuan. The change project will not increase land acquisition. After the change, the entire factory will still cover an area of 40.13 hectares, with a workforce of 469 people and an annual production working time of 8,000h/a.
Old production capacity is returning to the market one after another, and PTA’s “barrier lake” has become a time bomb
The 4 trillion investment derived from the financial crisis in 2008 brought about a spurt in the traditional chemical industry. After 2011, China entered the peak of PTA production capacity. From 2011 to 2015, the average domestic PTA production capacity increased by 27%. The peaks of production were in 2011, 2012 and 2014, with increases of 4.76, 11.4 million and 10.41 million tons respectively. On the other hand, in the polyester industry chain, the production capacity of the polyester part began to decline after reaching its peak in 2012. The result was that PTA gradually moved from partial reliance on imports to excess.
The rapid expansion of production capacity compresses industry profits, while the mismatched supply and demand environment between upstream and downstream directly forces the clearing of production capacity. Compared with other industries, PTA is the first to enter the overcapacity period and the first to enter the production capacity integration period. Small and medium-sized devices, competition Weak production capacity is being eliminated. In 2015, due to bankruptcy and reorganization of Far East Petrochemical, all 3.2 million tons/year PTA units were suspended. Xianglu Petrochemical’s 4.5 million tons/year unit was suspended for a long time due to an accident in the upstream PX unit. PTA production capacity reduction has made phased progress. As of the end of 2016, my country had long-term shutdowns of 16 PTA units, with a total production capacity of 14.08 million tons/year; other regions in Northeast Asia had long-term shutdowns of 11 PTA units, involving a total production capacity of 3.38 million tons/year.
However, the problem of overcapacity still exists. Although these idle production capacities do not directly participate in market competition, it is difficult to completely withdraw from the market in the short term.The market has become a “barrier lake” in my country’s PTA industry. Once the market supply and demand situation and profit margins improve slightly, these production capacities may soon restart and enter the market, causing the market to return to a state of oversupply and profit margins narrowing again. The “barrier lake” effect formed by idle production capacity has, to a large extent, restricted the overall profitability of the PTA industry.
At the end of 2016, Reignwood Group took over Far East Petrochemical, and the fourth PTA production unit with an annual output of 1.2 million tons has resumed trial production. The restart time of Xianglu Petrochemical is temporarily uncertain, but the original 1.5 million tons/year PTA project capacity has been changed to 4.5 million tons/year, which also indicates the expansion of production capacity and the approaching restart time. Old production capacity will gradually return to the market, and the weak balance between PTA supply and demand will be broken by then.
</p
