BASF Feluy, Belgium PA closure will add length to OX market

16 June 2005 16:08  [Source: ICIS news]

LONDON (CNI)--Following yesterday’s announcement by BASF that it plans to shut its 90,000 tonne/year phthalic anhydride (PA) unit at Feluy, Belgium, a company official said Thursday that the orthoxylene (OX) market would become slightly long in Europe.

 

The source declined to say when the Feluy unit would close.

 

Production is being optimised at both the Feluy and Ludwigshafen plants, according to the official, in line with demand. Poor demand for phthalic anhydride, especially from Asia, has weakened the orthoxylene market in Europe.

 

There was no intention to put pressure on price negotiations for the third quarter, according to the BASF official. Buyers and sellers on Thursday agreed that the price would go down, but could not give a precise indication of by how much it might drop.

 

A source at BP Refining conceded that the impending closure of the plant would represent a challenge to orthoxylene producers, saying: “We will probably see some changes in the way the orthoxylene market functions in Europe.”

 

Many observers disputed the idea that less competitive orthoxylene units might shut down as a result of the lost demand for 86,400 tonne/year from the closure of Feluy.

 

Technical solutions were the answer to the problem, market sources said. Demand for paraxylene (PX) continues to drive co-product orthoxylene production and a reduction in orthoxylene output would help bring the market more into balance.

By: Philippa Davies
+44 208 652 3214

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