16 July 2008 04:27 [Source: ICIS news]
By Helen Yan
SINGAPORE (ICIS news)--Several major Asian acrylonitrile (ACN) makers have cut operating rates as margins have been squeezed or wiped out by weak demand and soaring upstream energy and feedstock prices, producers said on Wednesday.
Producers including Asahi Kasei of ?xml:namespace>
“We will reduce our production by 30% until the market recovers,” a source at INEOS said.
Asahi has slashed operating rates at its plants in
Asahi Kasei operates two ACN lines at Mizushima with a combined capacity of 300,000 tonnes/year and another 150,000 tonne/year unit at
Taiwanese producer, Chinese Petroleum Development Corp (CPDC) will shut one line in August for nine days and another line for 20 days. Each line has a capacity of 95,000 tonnes/year.
INEOS settled its July contract with major Asian customers at $2,150/tonne CFR (cost and freight)
“We have negative margins as our production costs have gone up to $2,300/tonne and we cannot continue to run at full rates and operate at a loss,” the INEOS source said.
INEOS runs a 460,000 tonne/year ACN plant at
Asian ACN producers also said that their margins have been squeezed and that the offers for August are pegged at $2,200-2,300/tonne CFR Asia.
However, buying interest has been limited, given the lacklustre downstream acrylic fibre and acrylonitrile-butadiene-styrene (ABS) markets.
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