China's Zhejiang Yisheng cuts PTA production on poor margins

23 February 2012 03:22  [Source: ICIS news]

SINGAPORE (ICIS)--China’s Zhejiang Yisheng Petrochemical has cut operating rate at its 2m tonne/year No 3 purified terephthalic acid (PTA) plant at Ningbo in Zhejiang province since the middle of the week because of deteriorating margins, a company source said on Thursday.

The operating rate at the unit has been lowered to around 80% from close to 100%, the source said.

“The move is to reduce losses and to balance weakened demand,” he added.

The spread between spot PTA and PX prices narrowed to $95-99/tonne (€72-75/tonne) in the middle of February, lower than the $116/tonne spread in the beginning of the month.

A minimum spread of $120-150/tonne is must to break even.

Some downstream polyester makers in Zhejiang province have started shutdowns or production cutbacks in the past week to counter mounting 16-27 days worth of inventories, market sources said.

Zhejiang Yisheng’s other two Ningbo plants and one Dalian line, with a combined capacity of 3.5m tonne/year of PTA, are not affected, the source said.

By: Becky Zhang
+65 6780 4359

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