21 November 2008 21:25 [Source: ICIS news]
SINGAPORE (ICIS news)--Taiwan’s Nan Ya Plastics plans to shut the second of its two 350,000 tonne/year monoethylene glycol (MEG) lines at Mailiao next week, due to poor economics and a dearth of feedstock ethylene, company sources said.
The company had in October shut one of the two 350,000 tonne/year lines as well as another unit of similar capacity, which is a joint venture with another Taiwanese petrochemical producer, China Man-made Fiber.
“By the end of this month, we’d have shut three lines in total, as our big cracker remains shut, and we don’t have much ethylene to spare,” one of the sources said.
The company’s fourth and biggest line, a 700,000 tonne/year facility at the same Mailiao site on the west coast of Taiwan, would continue to run normally, another source said.
MEG spot prices had fallen as low as $420/tonne (€336/tonne) CFR (cost & freight) China in October, before recovering slightly to the current $450-460/tonne CFR China levels.
Based on prevailing feedstock ethylene costs of $380-400/tonne CFR NE Asia, MEG producers could have margins of around $80-100/tonne, but most of Nan Ya’s raw material are inventories at much higher prices.
Between October and early November, Nan Ya, like most other MEG producers in Asia, made losses for the first time in almost ten years.
Nan Ya is part of the Formosa group, Taiwan’s largest petrochemical company and one of the island’s private enterprises.
($1 = €0.80)
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