PCS lowers cracker output on high naphtha costs

07 March 2008 13:56  [Source: ICIS news]

SINGAPORE (ICIS news)--Singapore’s PCS has reduced its cracker’s operating rates to below full capacity due to high feedstock naphtha costs, resulting in lower output of aromatics, said a company source on Friday.

 

“Aromatics production is lower,” he said.

 

Declining to reveal the reduced operating level, the source said that the cracker’s margins were poor due to the rally in naphtha prices.

 

Production levels had been reduced since the beginning of the month and the company was assessing the market to decide when the cracker’s output would be ramped up, he added.

 

The Jurong island-based plant produces 150,000 tonnes/year of toluene and 80,000 tonnes/year of solvent grade xylene.

 

Meanwhile, a southeast Asia-based trader of solvent grade xylene said that the material was in tight supply in the region due to a reduction in production levels by regional makers.

 

The naphtha to toluene spread was calculated at $74-87/tonne, while the spread with solvent grade xylene was at an even narrower range of $24-32/tonne. Traders estimated $130-140/tonne to be the break-even point and variable cost of production from naphtha to mixed xylenes (BTX).

 

Toluene prices in Asia were assessed at $975-990/tonne FOB (free on board) Korea, solvent grade prices were at $925-935/tonne FOB Korea, while naphtha prices were at $901-903/tonne CFR (cost and freight) Japan, according to global chemical market intelligence service ICIS pricing.


By: Mahua Chakravarty
+65 6780 4359



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