FocusProduction issues to keep SE Asia PX in tight supply

07 February 2012 04:21  [Source: ICIS news]

By Bohan Loh & Lester Teo

SINGAPORE (ICIS)--A series of production hiccups and extended turnarounds at paraxylene (PX) facilities in southeast Asia is likely to keep supply tight well into the second quarter, market sources said on Tuesday.

“End-users seem to be finding it very difficult to buy cargoes on a CFR [cost & freight] SE [southeast] Asia basis,” said a PX broker in northeast Asia.

At least three aromatics producers in southeast Asia were heard to have either experienced production difficulties or extended scheduled turnarounds, according to market sources.

There was talk among several PX traders early in the week of production problems at ExxonMobil’s aromatics units in Singapore, although reasons were undisclosed.

When contacted, an ExxonMobil spokesperson said via email: “It’s our practice not to comment on the operational status of our facilities.”

ExxonMobil exported 40,458 tonnes of PX from Singapore in December, a marked 36.6% drop from the previous month, according to data from IE Singapore.

The December figure was 23.4% lower than the 11-month average of 52,822 tonnes from January-November 2011, IE Singapore data showed.

ExxonMobil operates two PX producing units in Singapore with a combined nameplate capacity of 870,000 tonnes/year, or 72,500 tonnes/month. The aromatics major exports all of its PX output as there are no downstream purified terephthalic acid (PTA) units in Singapore.

Exports of PX in January from ExxonMobil’s Singapore-based units are also expected to be low, with a sole 5,000 tonne shipment destined for Merak in Indonesia, market sources said.

ExxonMobil is a key PX supplier to PTA makers in Thailand, China, Indonesia and India.

Elsewhere, key cargo off-takers from Indonesia’s Trans-Pacific Petrochemical Indotama (TPPI) said that the Tuban-based PX maker will be unable to supply spot shipments for March for undisclosed reasons.

TPPI had earlier announced a more than one-month delay in the restart of its 550,000 tonne/year PX unit in Tuban to end-February.

Company officials from TPPI could not be immediately contacted for comment. PX shipments from TPPI, totalling 40,000-50,000 tonnes per month, are usually exported as spot cargoes to China, where it enjoys a 2% import tariff exemption.

PTA makers in southeast Asia were heard to have tried sourcing feedstock PX from TPPI over the past few weeks because of tight supply and high freight rates if they were to buy raw materials from the key Japan and Korea exporting regions.

Freight rates for a 5,000-tonne shipment were hovering in the low-$40s/tonne from Ulsan to Map Ta Phut, $16-17/tonne from Sri Racha to Map Ta Phut and in the low-$30s/tonne from Tuban to Map Ta Phut.

Continuing production hiccups at PTT Global Chemical’s (PTTGC) 616,000 tonne/year unit in Map Ta Phut are worsening tight PX supply in the region, said market sources.

“Production at the plant is still unstable and we have ceased PX exports to fulfil contractual obligations to our customers as far as possible,” said a PTTGC source.

He added that the force majeure declared at the plant in mid-December will only be lifted after the scheduled one-month turnaround in March.

“We will only lift the force majeure once we have stabilised production at the plant,” the source said.

PTTGC experienced an outage at the unit on 13 December and restarted the facility two weeks later, but continues to suffer from unstable PX production because of an unresolved leakage.

Supply of PX from the Middle East has also been reduced over the past month because of production hiccups at Kuwaiti Petrochemical Industries Co’s (PIC) 820,000 tonne/year Shuaiba unit and a scheduled turnaround at Aromatics Oman’s 815,000 tonne/year Sohar facility.

Both PIC and Aromatics Oman are key PX suppliers to India, southeast Asia, Taiwan and China.

Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections

By: Bohan Loh
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