Samnam cuts back Korean PTA production

26 June 2007 14:07  [Source: ICIS news]

SINGAPORE (ICIS news)--Samnam Petrochemical has reduced operations at all of its terephthalic acid plants at Yeocheon in South Korea by 10-20% due to poor economics, a company source said on Tuesday.

 

Its No 1, 2 and 3 lines were operating at about 80% of nameplate capacity, while its No 4 unit was running at 90%.

 

The four lines’ nameplate capacities are 300,000 tonnes/year each (No 1 and 2), 600,000 tonnes/year (No 3) and 500,000 tonnes/year (No 4). The second unit produces purified terephthalic acid (PTA), while the rest produce the less pure qualified terephthalic acid.

 

“Prices had been falling for June and demand was very bad,” said the source, who added that squeezed margins remained the most important factor behind Samnam’s decision to scale back production.

 

Feedstock paraxylene (PX) spot prices were as high as $1,300/tonne CFR (cost and freight) Taiwan earlier this month, although they had retreated to around $1,130/tonne CFR by this week.

 

PTA on the other hand, dropped as low as $900/tonne CFR China this month and looked set to fall into the $800s/tonne CFR later this week

 

“If the situation worsens, as widely expected, further [production] cutbacks are sooner or later,” said the source.

 

Samnam is a joint venture of Japan’s Mitsubishi Chemical (40%), South Korea's Samyang Petrochemical (40%) and GS-Caltex Oil (20%).

 

 

By: Salmon Aidan Lee
+65 6780 4359

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