Samsung Petchem cuts Ulsan PTA output

19 June 2007 03:58  [Source: ICIS news]

SINGAPORE (ICIS news)--Samsung Petrochemical, the largest purified terephthalic acid (PTA) maker in South Korea, has shut its No 1 200,000 tonne/year unit in Ulsan late last week for about two weeks, company sources said.

The company was also running its No 3 450,000 tonne/year line at the same site at reduced rates of around 80-90%, they added late on Monday.

"We’ve not decided whether to do anything in terms of operating rates in the other two lines which we have," said one of the sources, referring to the company’s No 2 unit in Ulsan and No 4 plant at Daesan.

They declined to say why Samsung’s output was cut, but a trader close to the company said poor economics was the main consideration. The company has a total PTA nameplate capacity of 1.8m tonne/year.

Like many other PTA makers, Samsung’s margins had been badly squeezed by rising feedstock paraxylene (PX) costs and lacklustre PTA pricing over the past one and half years.

PX contract price for June stood at $1,245/tonne CFR (cost and freight) Asia, up sharply from May’s $1,165/tonne. Not only did PTA prices fail to rise, they fell from May’s peak of $960/tonne CFR China to $900/tonne CFR on Friday, according to global chemical market intelligence service ICIS pricing.

Other PTA producers in Asia which had scaled back operations recently included Hualian Sunshine Petrochemical, Tuntex Petrochemical, Mitsui Chemicals and Siam Mitsui.

By: Salmon Aidan Lee
+65 6780 4359

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