13 March 2012 10:04 [Source: ICIS news]
SINGAPORE (ICIS)--Producers of dioctyl phthalate (DOP) in northern China have shut their plants because of poor margins in the face of weak demand and high production costs, industry sources said on Tuesday.
Hebei Xiongxian Haiyang Chemical shut its 40,000 tonne/year DOP plant at Hebei on 13 March, a company source said.
Xiongxian Jinquan Chemical shut its 40,000 tonne/year DOP plant at Hebei on 12 March and Beijing Huaying Chemical shut its 45,000 tonne/year plant at Beijing on 11 March, company sources said.
Weak demand for DOP led to high inventories of producers in northern China and pushed prices so low that producers could not cover their costs, a DOP maker said.
Producers have therefore been forced to shut down their plants to minimise losses, another DOP producer said.
DOP prices were assessed at yuan (CNY) 12,700-12,800/tonne ($2,006-2,022/tonne) EXW (ex-works) on 13 March in northern China, down by CNY100/tonne from a week ago, according to data from Chemease, an ICIS service in China.
The prices of feedstocks 2-ethylhexanol (2-EH) and phthalic anhydride (PA) were at CNY11,750/tonne EXW and CNY11,550/tonne EXW respectively on 13 March, according to Chemease data.
This indicates a fall in margins by CNY115/tonne from a week ago, according to Chemease data.
The shutdown at the plants may cause DOP supply to fall by 300 tonnes/day, a market source said, adding that prices are unlikely to rise substantially as demand will not recover in the short term.
($1 = CNY6.33)
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