19 September 2011 07:45 [Source: ICIS news]
By Quintella Koh
SINGAPORE (ICIS)--Asian phthalic anhydride (PA) and dioctyl phthalate (DOP) producers are preparing for a rough ride as they move into the fourth quarter of this year, industry sources said on Monday.
“With such high feedstock orthoxylene (OX) costs, PA producers are losing money with every tonne of material produced,” a South Korean producer said.
OX spot prices were assessed at $1,575/tonne (€1,150/tonne) CFR (cost & freight) northeast (NE) ?xml:namespace>
Typically, a tonne of PA is made by using 950kg of OX. A producer then needs to add $100/tonne to its price to cover conversion costs. Based on the assessed OX and PA prices on 16 September, Asian producers are losing $136.25 for each tonne of PA they make.
“This situation is dire, which is why regional producers are slashing PA production rates,” a Chinese producer said.
“OX and PA prices are high at present. It really does not make sense for us to keep our DOP production rates high,” the official said.
The price of DOP was assessed at $1,815/tonne CFR east Asia on 16 September. OX prices are likely to remain high in the coming weeks because of tight supply, industry observers said.
The high prices of feedstock isomer-grade xylene (IX) and comparatively lucrative co-product paraxylene (PX) are keeping most OX makers focused on maximising their PX yields, the observers added.
($1 = €0.73)
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