China isomer grade xylene set for oversupply in Q4

08 October 2008 12:08  [Source: ICIS news]

SHANGHAI (ICIS news)--China’s isomer grade xylene market may suffer from oversupply in the fourth quarter due to a cut in downstream paraxylene (PX) output as a result of declining demand for polyester, said producers and traders on Wednesday.

 

Yangzi Petrochemical had cut its PX output by 10% at its 850,000 tonne/year unit and cut output at its 260,000 tonne/year OX plant - both based in Nanjing city, east China - by more than half this month, reducing consumption of xylenes by about 20,000 tonnes/month, said a company source.

 

“We are also considering suspending imports because part of our solvent grade xylene supply is imported,” said the source.

 

Meanwhile, Qingdao Lidong Chemical, a major PX producer located in Shandong province, east China, was running its 700,000 tonne/year PX plant at a 65-70% operating rate on weak downstream purified terephthalic acid (PTA) sector, a company source said.

 

“The operation rate is expected to trim further if the polyester chain still remains weak,” the source added.

 

The profitability of PX was declining on weak polyester demand due to the slowdown in the world economy, said market participants.

 

In line with a weakening market, new isomer grade xylene capacity due to come on stream in China could lead to a situation where supply exceeded demand, said traders.

 

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By: Dolly Wu
+65 6780 4359

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