PET Industry Chain Analysis: From Crude Oil to End-Use Applications

Upstream: Crude Oil Extraction and Refining

The production of PET resin is positioned within the downstream segment of the petrochemical industry chain, originating from the extraction of crude oil. 

Crude oil is extracted from underground reservoirs using drilling technologies on land or at sea. The extracted crude oil is refined at oil refineries through processes such as distillation, cracking, and reforming, which decompose it into a range of valuable chemical products.

The price of PET resin is significantly influenced by fluctuations in crude oil prices, as both PTA and EG are derived from petroleum. Recently, geopolitical tensions in the Middle East have raised concerns about oil supply, leading to a surge in crude oil prices. This increase in crude oil prices has consequently driven up the cost of PET resin.

Midstream: Intermediate Synthesis

Paraxylene (PX) Production Process

The production of paraxylene (PX) is a pivotal stage in the oil refining process, where catalytic reforming converts low-octane hydrocarbons from naphtha into high-octane aromatics. 

In this process, naphtha undergoes high temperatures (500-550°C) and pressures with platinum-alumina catalysts facilitating dehydrogenation, cyclization, and aromatization reactions to yield paraxylene, along with benzene and toluene. 

Paraxylene is essential for the production of terephthalic acid (PTA), which is a crucial precursor in PET resin production. Therefore, the efficiency and output of PX production significantly impact the entire PET supply chain.

Terephthalic Acid (PTA) Synthesis

The synthesis of PTA begins with the oxidation of PX. Under high temperature and pressure conditions, PX reacts with oxygen to produce PTA. This oxidation process typically employs metal catalysts, such as cobalt and manganese, to enhance the reaction's efficiency. Post-oxidation, crude PTA undergoes filtration and crystallization, followed by multiple recrystallization and drying steps to achieve high purity. The resulting PTA is then used as a raw material for PET resin production.

As of the latest data, global PTA production capacity exceeds 90 million tons per year. China leads as the largest producer and consumer of PTA, with its capacity representing a significant portion of global output, followed by India, Southeast Asia, and the Middle East. Typically, producing one ton of polyethylene terephthalate (PET) requires approximately 0.6 tons of PTA, making PTA a critical raw material.

Ethylene Glycol (MEG) Production 

MEG is synthesized through the hydration of ethylene oxide (EO). Ethylene oxide is derived from the oxidation of ethylene, which is obtained via the steam cracking of ethane or naphtha from crude oil. The production involves oxidizing ethylene to produce ethylene oxide, which is then hydrated to yield ethylene glycol. The ethylene glycol produced is then purified through distillation and other methods to meet polymer-grade standards.

MEG can be produced using three primary methods: from natural gas, petroleum, or coal. In the natural gas route, synthesis gas is generated through steam reforming and then reacted with carbon dioxide or carbon monoxide to produce ethylene glycol. In the petroleum route, ethylene or ethylene oxide derived from oil refining processes is used. For coal, gasification produces synthesis gas, which is further converted into ethylene glycol. Although the coal-based method is more complex, it is utilized in regions with abundant coal resources. The choice of production route depends on resource availability and economic factors.

Wankai New Materials Co., Ltd. has established subsidiaries in natural gas-rich regions to leverage the natural gas route for the project "1.2 million tons MEG and 100,000 tons electronic-grade DMC." This initiative maximizes the economic and environmental benefits of natural gas, integrating the industrial chain and significantly enhancing cost competitiveness in bottle-grade PET chip production.

Downstream: Polymerization of PET

The production of bottle-grade PET chips, such as WK-801, involves two main reaction stages: liquid-phase and solid-state polymerization.

In the liquid-phase polymerization stage, PTA and MEG are the primary reactants, with antimony-based compounds serving as catalysts. Co-monomers such as isophthalic acid (IPA) and diethylene glycol (DEG) are used for copolymer modification, along with certain stabilizers, U1 additives, and blue agents. The process involves two stages of esterification followed by three stages of polycondensation under controlled temperature, pressure, and reaction times to produce the base polyester chips suitable for bottle-grade applications.

The solid-state polymerization stage further enhances the polymer’s viscosity to meet the specifications for bottle-grade polyester chips. This process is typically conducted under vacuum conditions to improve polymerization and the physical properties of the final product. The PET melt generated from the polymerization reaction is then extruded, cooled, and cut into PET chips.

End Applications of PET

Initially, PET was predominantly used in the textile industry, but as technology advanced and market demands evolved, its applications have expanded significantly, particularly in the packaging sector. Now, PET is now a major material in liquid packaging and flexible packaging, with increasing industrial uses as well. Advances in understanding PET and improvements in modification technologies continue to broaden its application spectrum.

Beverage and Food Packaging

PET bottles are valued for their transparency, lightweight, impact resistance, and excellent gas barrier properties, which help preserve the freshness and flavor of beverages. The largest application of PET in packaging is for beverage bottles, including those for mineral water, carbonated drinks, and juices. Market research indicates that PET bottles account for over 60% of the global beverage bottle market, covering water, carbonated drinks, and juice packaging.

PET is also used in food packaging materials such as containers, trays, and films. Its superior barrier properties and chemical resistance make it suitable for the safe packaging of various food products.

Textiles

PET is a primary raw material for producing polyester fibers. Polyester fibers are favored for their high strength, excellent durability, elasticity, and wrinkle resistance, making them widely used in textile manufacturing. 

In the apparel industry, polyester fibers help maintain garment shape and reduce deformation after washing. For home textiles, their durability and ease of care make them popular. In industrial applications, the strength and wear resistance of polyester fibers are ideal for high-performance uses such as industrial filtration materials and mechanical belts.

Industrial Applications: PET Films and Engineering Plastics

PET films are known for their outstanding insulation properties, mechanical strength, and clarity, and are used across various sectors including electrical insulation, magnetic tapes, and display screen protectors. 

In electrical equipment, PET films provide critical isolation to prevent current leakage and short circuits. High mechanical strength PET films ensure the long-term stability and durability of magnetic tapes, while their clarity makes them suitable for display screen protection, safeguarding screens from physical damage while maintaining visual clarity and touch sensitivity.

Modified PET engineering plastics are widely used in automotive, aerospace, electronics, and mechanical industries. In the automotive sector, PET engineering plastics are used to manufacture both interior and exterior components, such as dashboards and door handles, enhancing vehicle durability and fuel efficiency. In aerospace, the lightweight and high-temperature resistance properties of PET plastics make them ideal for aircraft components, improving aircraft performance and fuel efficiency.

Conclusion

The PET industry chain encompasses intricate chemical reactions and advanced manufacturing processes, beginning with crude oil extraction and extending to the production of PET resin and its end-use applications. Looking ahead, technological innovations and sustainable development efforts will continue to shape the future of the PET industry chain.