Toray Halts Production of PTA Nationwide by 2026

In a significant industry shift, Toray Industries has announced it will cease production of purified terephthalic acid (PTA) in Japan by the fiscal year 2026. This decision marks the end of PTA manufacturing in the country, as Toray is currently the sole producer of this essential polyester fiber raw material in Japan. The company's Tōkai plant in Aichi Prefecture, which has an annual capacity of 165,000 tons, will be shut down.

This follows a similar move by Mitsui Chemicals, which closed its high-purity PTA facility in Yamaguchi Prefecture in 2023. Mitsui has since shifted its production to its facility in Thailand and is importing PTA back to Japan for sales. Toray's decision to discontinue production is influenced by the rising costs associated with equipment maintenance and the benefits of external sourcing.

PTA plays a crucial role in both the petrochemical and textile fiber industries, with over 90% of PTA being used for polyester production. The primary downstream products include polyester chips, polyester filament, and short fibers, which are widely utilized in textiles and apparel.

The PTA industry is characterized by significant monopoly power, with production concentrated among large companies with integrated supply chains. The core cost competitiveness of PTA lies in the efficiency of equipment and production processes, making it a classic latecomer advantage sector.

China's PTA production has experienced rapid expansion over the years, with the industry evolving through two major phases. The first phase focused on achieving economies of scale, while the second phase saw growth driven by integrated refining and chemical expansions. As of 2024, China accounts for over 70% of global PTA production capacity, reflecting its strategic importance in the global supply chain.