UpdateSam Nam to shut No 3, 4 QTA from Sat

19 September 2008 10:47 [Source: ICIS news]

(updates throughout)

SINGAPORE (ICIS news)--South Korea’s Sam Nam Petrochemical will shut down two qualified terephthalic acid (QTA) units at Yeocheon instead of just one, starting from Saturday 20 September instead of Monday, company sources said on Friday.

The company held an emergency meeting with its shareholders earlier on Friday and had originally planned to stop its 600,000 tonne/year No 3 unit on 22 September due to poor economics, one of the sources said.

The company would now shut both the No 3 unit and the No 4 500,000 tonne/year line at the same site.

“Some of our colleagues are in China, and they reported that sales had been very, very slow, so our big bosses decided that we’ll cut back on operations immediately,” said the source.

"The market is so bad, we’ve no choice but to shut the line, even though our feedstock suppliers are begging us not to," said another of the sources, who added that the shutdown could last “around two weeks".

Another company source said that the No 4 line had been running at around 90% of nameplate capacity after restarting in the second half of August following a two-week shutdown.

A third source added that the No 1 300,000 tonne/year line had remained idle since 19 August, after restarting very briefly from a two-week turnaround in late July.

Like most of its counterparts, Sam Nam had been facing squeezed margins as prices of their products fell to $810-820/tonne CFR (cost and freight) China earlier this week, while feedstock paraxylene (PX) costs remained high at $1,120-1,130/tonne CFR Taiwan.

Although PX had fallen from the year’s high of $1,705/tonne CFR Taiwan, the drop was still unable to cover an even steeper decline in QTA prices.

Sam Nam also produces 300,000 tonnes/year of purified terephthalic acid (PTA) at its No 2 unit at same Yeocheon site, which is operating normally.

Sam Nam is jointly owned Japan’s Mitsubishi Chemical with 40%, South Korea’s Samyang Petrochemical with 40% and GS-Caltex Oil with 20%.

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By: Salmon Aidan Lee
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