Siam Mitsui mulls idling PTA units due to oversupply

24 May 2007 09:29  [Source: ICIS news]

SINGAPORE (ICIS news)--Siam Mitsui is evaluating whether to idle more of its purified terephthalic acid (PTA) lines in Map Ta Phut, Thailand, in June if demand weakens further, a company source said on Thursday.

 

Currently, the company is running its three PTA lines with a total capacity of 1.4 million tonnes/year at about 90-95% of nameplate capacity.

 

It will shut its No 3 500,000 tonne/year unit in mid-June for a week-long turnaround.

 

“Margins have been fine in April and May but they were still not enough to cover the losses made in earlier months,” said the source.

 

“If demand weakens in June and our margins get squeezed again, we will likely shut down more [capacity],” added the source.

 

PTA producers have faced increasingly squeezed margins over the past year as more capacities have come on stream and threatened to push the market into oversupply.

 

With feedstock para-xylene (PX) in tight supply, raw material costs for PTA makers have also risen sharply. Several PTA producers have consequently been running down operations from time to time in order to minimise losses.

 

On Thursday, PX prices were at $1,280-1,290/tonne CFR (cost and freight) Taiwan but PTA prices stood at no higher than $960/tonne CFR China.

 

By: Salmon Aidan Lee
+65 6780 4359

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