Chevron Phillips Chemical Co.'s closing of a plant making PET feedstock paraxylene might not have much impact on the North American PET sector.
CP Chem, based in The Woodlands, Texas, closed its paraxylene unit in Pascagoula, Miss., at the end of 2018. A company spokesman said that officials decided that the plant "is not material to the company's financial results."
He added that CP Chem has been communicating with customers regarding the decision to give them time to establish new supplier arrangements, and that no other operations are impacted by this decision. He had no comment on any job losses.
Market analyst Phil Karig said that although the planned reduction is substantial for North American paraxylene capacity, the region represents less than 10 percent of global capacity for that material.
"Imports of PX [paraxylene] to the U.S. for the last several years have averaged about 20 percent of U.S. nameplate capacity," Karig said in an email to Plastics News. "It's possible that more PX could flow into the U.S. if it's ever needed for additional PET production, but that's a big question mark in light of continued shipments of low-cost foreign PET [resin] to the U.S."
He added that "another thing to watch" is that if more foreign paraxylene is ever needed in the U.S., Venezuela — with "all of its political uncertainty" — has been the largest exporter of the material to the United States.
Gordon Haire, chemicals research director with the Wood Mackenzie consulting firm in Houston, said in a research note that the timing of the closing of the CP paraxylene unit "was mainly driven by the imminent requirement for major maintenance spend on the asset." He added that the plant opened in the 1960s and has annual production capacity of about 1.1 billion pounds.