Special

Report

Phthalic Anhydride: A Techno-Commercial Profile

Part 1: Indian Scenario
PANKAJ DUTIA

E-mail: pankaj@chemicalweekly.com
Phthalic Anhydride (PAN) is a principal commercial form of phthalic acid,
discovered in 1836. It was the first anhydride of a dicarboxylic acid to be used
commercially, and is comparable in its
importance to acetic acid. The most important reaction of Phthalic Anhydride is
with alcohols or diols to give esters or
polyesters.
Properties
PAN is a white crystalline solid, used
to manufacture synthetic resins, which
act as binders in paint products. Alkyd
resins account for over 80% of the resins
used in the paints industry. These synthetic resins are produced by condensing PAN with polyhydric alcohols, fatty
oils and acids. Generally, PAN is sold in
flake, molten or briquetted form. The dust
emanating from PAN flakes while handling or packing is not only inflammable,
but also hazardous to health.
Hence, PAN is not preferred in the
flake form. PAN, in liquid or molten form,
has the appearance and viscosity of water; however, it is inflammable and needs
to be stored and transported with adequate temperature controls.
In the West, PAN is mainly transported in liquid form, with suitable pre-

cautions, on account of its inflammable

nature and due to environmental considerations. However, in India, PAN is
largely shipped in the flake form.
Applications
The primary use of PAN is as a
chemical intermediate in the production of plastics from vinyl chloride. Phthalate esters, which function as plasticizers, are derived from PAN. Phthalate plasticizers are used for the production of flexible PVC products such
as cables, pipes and hoses, leather
cloth, shoes, film for packaging etc.
PAN has another major use in the production of polyester resins and other
minor uses in the production of alkyd
resins used in paints and lacquers; certain dyes (anthraquinone, phthalein,
rhodamine, phthalocyanine, fluorescin,
and xanthene dyes); insect repellents;
and polyester polyols for polyurethanes. Besides, it is also utilised as a
rubber scorch inhibitor and retarder.
Manufacture
PAN is produced by the catalytic oxidation of o-xylene (OX) with air or by the
catalytic oxidation of naphthalene. OX is
the preferred feedstock, but some producers have the capability to switch to
naphthalene.

Table 1
Physical properties of phthalic anhydride
Property

Value

Description
Molecular formula
Molecular weight
Boiling point
Melting point
Solubility

White or pale yellow crystals

C8H4O3
148.11 g/mol
295C
130.8C
Soluble in 162 parts water; soluble in hot benzene

Chemical Weekly

January 1, 2008

Contemporary processes are based

on OX and all plants in India employ this
route, as naphthalene is expensive and
not easily available. The process involves an exothermic reaction and is
used to produce high-pressure steam
that makes the plant self-sufficient in
power and steam requirements.
This process entails passing OX
through a reactor, which is an arrangement of tubes of clay or porcelain rings
coated with a catalyst (vanadium pentoxide or titanium oxide). Around 0.90tons of OX or 1.1-tons of naphthalene
yields 1-ton of PAN. In the Lurgi-BASF
Phthalic Anhydride Process, for instance,
the feedstock (naphthalene or OX) and
the oxygen in the air react over a fixed
bed catalyst to form primarily PAN. The
product is polished in a post-reactor to
reduce the level of impurities and to
slightly increase the reaction yield.
Part of the crude product is collected
as liquid in a first step. The remaining
quantity is solidified as sublimate and
subsequently molten off in switch condensers. The crude product so collected
is transferred as liquid to the three-step
purification part and finally leaves as
pure PAN in liquid form.
Most of the product is shipped to downstream users in liquid form; only a limited
amount is traded as solid material.
Producers & Production
With an aggregate installed capacity of 267,200-tpa across India, major
PAN producers include IG Petrochemicals Ltd (an EOU, with a capacity of
120,000-tpa) and Thirumalai Chemicals
Ltd (100,000-tpa).
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Table 2
Phthalic anhydride capacity in India
Company

Location

I.G. Petrochemicals Ltd.

Thirumalai Chemicals Ltd.
Asian Paints Ltd.
Mysore Petrochemicals Ltd.
S.I. Group Ltd.

Taloja, Maharashtra
Ranipet, Tamil Nadu
Ankleshwar, Gujarat
Raichur, Karnataka
Thane, Maharashtra

[Tons per annum]

Installed capacity
120,000
100,000
25,200
12,000
10,000

Total
While these two jointly account for
around 82% of total capacity, the remaining 18% is held by Asian Paints Ltd.
(25,200-tpa), Mysore Petrochemicals
Ltd. (12,000-tpa) and S.I. Group, earlier
known as Schenectady Herdillia Ltd.
(10,000-tpa).
I.G. Petrochemicals Ltd. (IGPL)
The plant is located at MIDC, Taloja
(Raigad District, Maharashtra), 50-km
from Jawaharlal Nehru Port Trust (JNPT)
terminal. The plant is based on the VonHeyden Low Energy Process of Wacker
Chemie GmbH (Germany) and engineered
by Lurgi (Gerrmany). IGPL has increased
its capacity from 45,000-tpa to 120,000tpa, making it the largest manufacturer
of PAN in India.

267,200
and various organic acids and derivatives. During 2006-07, the company produced 74,868-tons of PAN, utilizing 75%
of its capacity and achieved sales of
72,000-tons PAN valued at Rs. 472-crore.
Table 3
Trends in Production and
Capacity Utilisation
Years
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07

Capacity
[tpa]

Production
[tons]

Capacity
Ut. [%]

243,000
243,000
243,000
243,000
243,000
257,200
267,200

146,229
172,437
191,784
171,792
185,281
191,622
222,500

60.0
71.0
79.0
71.0
76.0
75.0
83.0

Source: CMIE & Annual Reports

Thirumalai Chemicals Ltd. (TCL)

Thirumalai Chemicals Ltd. is a publicly owned company, which manufactures and markets organic acids, anhydrides and derivatives for the plastics,
paints, resin industries and additives for
the food and feed industry.

Production of PAN in India has increased from 1.46 lakh tons in 200001 to 2.22 lakh tons in 2006-07, registering a compounded annual growth
rate of 7.25% during the last seven
years. Capacity utilization has increased from 60% to 83% during the
same period.

The company s first plant to manufacture PAN was set up in 1973 at

Ranipet, 100-km from Chennai. In the
last 25 years, it has grown into a highly
profitable enterprise, rapidly expanding into the manufacture of maleic anhydride, fumaric acid and malic acid

Trade
PAN is both imported as well as exported from the country. Imports have
increased from over 5,000-tons in
2000-01 to over 24,000 tons in 2005-06,
before declining in 2006-07 to a little over
12,000-tons.

The unit CIF value paid in imports has

also increased from Rs. 29 per kg to
Rs. 49 per kg in the same period. Imports have been mainly from Israel, Indonesia, South Korea, Thailand and Taiwan. The change in imports is not very
significant, considering the sharp decrease in import duty on PAN.
Table 4
Import & Excise duties on
phthalic anhydride in India
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08

Import duty

Excise duty

35.3
20.0
20.4
15.3
12.8
7.7

16.0
16.0
16.0
16.0
16.0
16.0

Exports of PAN are much larger and

have increased from 31,872-tons in 200001 to nearly 75,000-tons in 2002-03, but
declined by 23 per cent in the next year
to 57,703-tons. Exports in 2006-07 were
around 56,030-tons, valued at Rs. 304crore.
The major export destinations are:
Egypt, Saudi Arabia, UAE, Kuwait, Iran,
China and Thailand. The FOB unit value
realized from exports has also increased
from Rs. 26 per kg in 2000-01 to Rs. 54
per kg in 2006-07.
Consumption pattern and demand
Apparent consumption of PAN has
increased from 1.20 lakh tons in 2000-01
to 1.78 lakh tons in 2006-07, registering
an annual compounded growth of 6.8
per cent in last seven years.
Domestic demand for PAN during
2006-07 is assessed at 175,000-tons, representing 76 per cent of total demand,
while exports constituted 24 per cent.
The plasticizer segment is the largest
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Table 5
Imports of phthalic anhydride into India
Quantity [Tons]

Value [Rs. Lakhs]

Unit value [Rs. per kg]

5,347
8,659
9,695
17,669
19,906
24,092
12,174

1,570
2,090
2,880
5,380
8,250
10,060
6,035

29.36
24.14
29.71
30.45
41.44
41.76
49.57

2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
Source: DGCIS

Table 6
Exports of phthalic anhydride from India
Quantity [Tons]

Value [Rs. Lakhs]

31,872
34,395
74,928
57,703
50,308
54,370
56,030

8,220
7,620
20,570
16,620
19,410
20,760
30,403

2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07

Unit value [Rs. per kg]

25.79
22.15
27.45
28.80
38.58
38.18

54.26

Source: DGCIS

Report

end-use segment, accounting for

29 per ent of the demand, followed by
alkyd resins (28 per cent), dyes & pigments (27 per cent) and miscellaneous
uses (16 per cent).
Price trends
PAN prices in the domestic market during January this year was higher by 31%
then a year ago in Jan 2006.
At the end of the year, PAN quoted at
Rs. 69 per kg, while in Dec 2006 prices
were 10% higher at Rs. 76 per kg.
The fluctuations in prices are
mainly due to volatile price movements of OX in the international market.
OX accounts for 77 per cent of the
total cost of PAN production and its
price is affected by trends in the coproduct, p-xylene and the domestic/
international supply situation.

Table 7
Imports of phthalic anhydride by country
2003-04
Quantity [Tons]
Israel
Korea South
Taiwan
Singapore
Thailand
Indonesia
Germany
China
Italy
Japan
USA
South Africa
Switzerland
Czech
Iceland
Turkey
Total
Chemical Weekly

2004-05

Value [Rs. Lakhs] Quantity [Tons]

2005-06

Value [Rs. Lakhs] Quantity [Tons]

Value [Rs. Lakhs]

7,720.0
3,112.1
54.0
140.0
0.0
5,704.8
564.2
111.5
51.9
17.0
27.7
140.0
26.0
0.0
0.0
0.0

22,594.5
10,659.0
154.4
424.9
0.0
15,795.7
2,624.2
524.9
258.8
133.9
213.9
326.8
130.3
0.0
0.0
0.0

5,848.1
9,106.4
423.0
100.0
300.0
1,180.0
299.8
51.0
440.1
302.0
157.7
0.0
0.0
771.0
20.0
600.0

2,271.2
3,799.0
215.0
38.1
113.1
482.7
152.4
22.6
209.1
130.8
80.2
0.0
0.0
304.8
7.3
279.2

9,166.5
8,930.8
2,255.0
1,671.0
820.0
760.0
125.8
122.1
100.0
87.5
52.1
0.0
0.0
0.0
0.0
0.0

3,747.3
3,650.5
995.7
691.8
339.8
296.4
95.6
72.8
67.7
50.3
52.7
0.0
0.0
0.0
0.0
0.0

17,669.2

53,841.2

19,599.2

8,105.6

24,091.7

10,061.5

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Table 8
Exports of phthalic anhydride by country

2003-04
Quantity [Tons]

Saudi Arabia

2004-05

Value [Rs. Lakhs] Quantity [Tons]

2005-06

Value [Rs. Lakhs] Quantity [Tons]

Value [Rs. Lakhs]

11,208.0

33,280.1

9,016.4

3,494.9

11,011.5

4,096.6

UAE

5,646.5

16,376.1

6,831.6

2,592.8

9,588.0

3,640.4

Egypt

1,693.5

4,837.8

2,893.0

1,103.1

6,035.5

2,419.9

Iran

6,233.5

17,748.8

8,429.0

3,362.2

5,040.0

1,940.0

China

7,016.2

19,847.6

2,712.0

1,003.1

4,428.0

1,665.9

Thailand

3,456.5

10,348.8

933.0

343.2

2,543.0

967.7

0.0

0.0

0.0

0.0

2,204.2

775.7

6,083.5

15,363.4

2,254.6

864.2

2,032.0

759.2

Kuwait

965.5

2,811.6

1,474.0

562.4

1,862.0

709.7

Tunisia

513.0

1,509.7

228.0

93.7

1,786.0

704.3

Turkey

521.0

1,454.1

851.0

287.8

1,281.0

542.1

Nigeria

1,170.5

3,722.0

1,154.0

457.3

1,029.0

402.6

Kenya

857.0

2,553.7

1,019.7

402.6

878.0

352.3

Jordan

0.0

0.0

515.0

204.9

702.0

256.8

1,306.5

3,895.3

1,470.0

547.6

658.5

255.4

594.0

1,928.7

1,285.0

500.9

508.0

200.7

Malaysia

3,427.5

9,791.1

1,531.0

562.9

489.0

189.4

Korea South

1,683.5

4,423.8

237.0

83.9

401.0

155.4

Tanzania

312.5

926.0

252.0

103.5

399.0

155.1

Italy

209.0

572.1

210.0

78.5

351.0

134.1

8.0

19.4

38.0

14.5

323.0

123.1

Sri Lanka

136.0

379.5

232.0

89.2

320.0

126.3

Indonesia

2,519.5

8,609.0

1,275.0

612.6

210.0

79.8

0.0

0.0

105.0

43.3

84.0

32.1

34.0

101.5

0.0

0.0

57.2

20.5

Korea North

0.0

0.0

0.0

0.0

53.0

18.2

Brazil

0.0

0.0

0.0

0.0

38.0

15.7

21.0

66.9

62.0

27.6

21.0

9.2

0.0

0.0

42.0

17.1

21.0

9.1

36.5

105.8

0.0

0.0

16.0

5.6

57,702.7

166,209.0

45,627.2

17,657.6

54,369.9

20,762.9

Netherlands
Pakistan

Bangladesh
Singapore

Syria

Ghana
Germany

Uganda
Madagascar
Belgium
Total

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Table 9
Apparent consumption of phthalic anhydride in India

2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07

[Tons]

Production

Imports

Exports

Consumption

146,229
172,437
191,784
171,792
185,281
191,622
222,500

5,347
8,659
9,695
17,669
19,906
24,092
12,174

31,872
34,395
74,928
57,703
50,308
54,370
56,030

119,704
146,701
126,551
131,758
154,879
161,344
178,644

Table 10
Consumption pattern of phthalic anhydride in India: 2006-07
End-use

Consumption [Tons]

Share [%]

CARG [%]

49,000
47,250
50,750
28,000

28.0
27.0
29.0
16.0

7.0
8.0
6.0
5.0

175,000

100.0

6.5

Alkyd Resins
Dyes & Pigments
Plasticizers
Others
Total

Demand forecast
As noted earlier, production of PAN
has registered CARG of 7.5%, while domestic demand has registered CARG of
6.8% in last seven years.
Strong growth in the end-user industries, such as paints and plasticisers has
augmented demand for PAN. Besides,

plasticisers and resins with varied applications in textiles, fibre reinforced

plastic are also in high demand.
Overall, domestic demand for PAN is
expected to grow at around 7% per annum for the next three years and at 5%
for the next two years. At these rates,
domestic demand for the years 2009-10
Others
16%

Plasticizers
29%

Report

Table 11
Price of phthalic anhydride in
domestic market
[Rs per kg]
Period
Jan
Feb
Mar
Apr
May
June
July
Aug
Sept
Oct
Nov
Dec

2007

2006

76
76
76
73
67
65
66
65
65
72
72
69

58
60
60
60
60
66
72
84
84
84
84
76

Note: Prices are for small packings in carbouys/

barrels and not for tanker load material
Prices are inclusive of excise duty, but exclusive of VAT.

and 2011-12 are estimated at 2.14 lakh

tons and 2.36 lakh tons respectively.
Assuming 30% export demand, total demand for PAN can be projected at 3.05
lakh tons for the year 2009-2010 and 3.37
lakh tons for the year 2011-12. A study
published by Crisil Research forecasts
demand for PAN to grow at 7.5 per cent
annually between 2006-07 to 2011-12,
driven by strong growth in the alkyds
industry and stable growth from
plasticisers.
Table 12
Forecast supply-demand
scenario for phthalic
anhydride
2006-07 2009-10 2011-12
Domestic demand 175,000 214,000 236,000
Exports
56,000 91,000 101,000
Total demand
231,000 305,000 337,000
Supply
267,200 322,700 322,700

Alkyd Resins
28%

Dyes &
Pigments
27%

As far as supply is concerned,

Thirumalai Chemicals would be adding
another 15,500-tpa of capacity through

Consumption pattern of PAN

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Table 13
Alternate supply-demand scenario for phthalic anhydride
Production
Imports
Exports
Demand
Capacity
Operating rate [%]

2006-07E

2007-08F

2008-09F

2009-10F

2010-11F

2011-12F

CAGR

222,741
15,000
65,000
175,319
257,200
87

262,700
12,800
75,400
190,082
297,200
88

299,900
11,900
104,000
205,095
327,200
92

339,400
11,200
128,000
220,550
367,200
92

340,200
10,600
112,000
235,973
367,200
93

343,400
10,200
99,900
251,150
367,200
94

9.0
-7.4
9.0
7.5
7.4

Source: CRISIL Research

revamping and modifications at its

existing unit, which will be completed by the end of January or February 2008.
IG Petrochemicals Ltd. (IGPL) is in
the process of expanding capacity at its
existing unit in Taloja, to 160,000-tpa
from the current 120,000-tpa. This enhanced capacity will tap growing national

and export markets. After expansion of

both these units, total supply for PAN
would be around 322,700-tpa, against the
projected demand of 3.37 lakh tons in
2011-2012, leaving a marginal gap between demand and supply.
The gap may widen if export demand
picks up. Crisil Research expects a

larger capacity build-up from IGPL and

TCL leading to an eventual capacity of
about 367,200-tpa by 2011-12.
It also expects exports to hover
around the 100,000-tons level. Operating rates are also expected to remain in
the mid-90s.
[Next week: International Scenario]

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