13 October 2006 04:10 [Source: ICIS news]
SINGAPORE (ICIS news)--Mitsui Chemicals, the Japanese purified terephthalic acid (PTA) major, has reduced operations at two of its lines and shut a third line for a three-week turnaround, a company source said.
According to the source, two small lines with a total capacity of 370,000 tonnes/year were running at reduced rates of about 75%, while a third 310,000 tonnes/year unit was shut earlier last week for a three-week turnaround.
“We are expected to lose about 35,000 tonnes of PTA in October,” said the source, who also confirmed that the production reduction was part of and parcel of the company’s rationalisation efforts on the back of tumbling PTA prices.
A trader familiar with Mitsui expressed little surprise that the company was making such moves. He said: “PTA margins had been squeezed to nothing since September. Raw material costs had come down, but not as fast as expected.”
PTA spot prices had tumbled to $880-$890/tonne CFR China this week, from $950-$955/tonne CFR China in end-September, and way below $1,160-$1,180/tonne CFR China in early September.
Based on contract paraxylene (PX) prices at $1,400/tonne and $1,260/tonne CFR Asia respectively in September and October, PTA producers had lost all margins, with many lines in ?xml:namespace>
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