Mitsui Chemicals Will Stop Producing PTA In Japan, Why?

Mitsui Chemicals announced on 15 March that it will close its purified terephthalic acid (PTA) plant in Otake, Iwakuni, Japan, in August 2023.

Mitsui Chemicals industrialised the production of terephthalic acid at its Iwakuni Otake plant in 1958, using its proprietary technology. In subsequent years, refining processes were added and production capacity was increased. In its heyday, Mitsui Chemicals produced 750,000 tonnes/year of PTA in Japan and exported to other countries.

In the last decade or so, the number of PTA production facilities worldwide has increased dramatically (mainly in China), leading to a decline in market conditions, as well as a reduction in domestic demand in Japan. Mitsui Chemicals believes that despite the reduction in its PTA capacity and some rationalisation measures, it is still unable to secure sufficient revenue to sustain PTA production in Japan.

GlobalData's latest report shows that global PTA capacity is expected to grow by 38% from 2020-2025, from 100 million tonnes to 140 million tonnes. Some 23 plants have been announced or planned, mainly in Asia and the Middle East, and the PTA industry has entered a period of concentrated bursts of new capacity, with the market showing an oversupply. It is thus clear that Mitsui Chemicals ceasing production of PTA in Japan is not an ineffective move.

Currently, Mitsui Chemical's Iwakuni Otake plant has an annual capacity of 400,000 tonnes of PTA. After the cessation of production, Mitsui Chemicals will maintain its existing sales system in the Japanese market by importing PTA from GC-M PTA in Thailand. Mitsui Chemicals owns 26% of GC-M PTA and PTT Global Chemical holds the remaining 74%.

In November 2021, Mitsui Chemicals proposed in its new long-term management plan VISION2030 to accelerate the restructuring of the phenol, purified terephthalic acid and polyurethane businesses in the Basic and Green Materials business to reduce the impact of external market volatility and improve competitiveness.