24 April 2012 19:26 [Source: ICIS news]
HOUSTON (ICIS)--Celanese shut an acetic acid plant in Singapore during the first quarter because of tough market conditions in Asia, the top executive for the US-based acetyls producer said on Tuesday.
New Celanese chief Mark Rohr said the 600,000 tonne/year acetic acid plant was taken down at the end of the quarter because of declining margins and demand there.
“The plant is still idled as we speak,” Rohr said in an earnings conference call. Rohr added that the market in Asia outside of China has become “sloppy” to the point that Celanese decided not to keep the plant running at such low margins.
“As soon as we can see a situation where margins have returned and demand has returned in a balanced fashion, then we’ll bring it back up,” Rohr said. “But until then, we’ll keep it idled.”
Rohr took over as CEO of Celanese on 2 April, succeeding David Weidman, who retired.
Rohr noted challenging market conditions in Asia outside of China in the company’s earnings report issued Tuesday, which showed Celanese net earnings up by 29% during the first quarter.
Celanese CFO Steve Sterin added that the Singapore plant was the company’s highest-cost unit to operate. He would not say how much more expensive it was.
One reason the Singapore plant is more expensive to operate than other Celanese plants is that it uses an oil-based feedstock and is exposed to rising crude prices, Sterin said. He added that the company would not re-open the plant unless it could earn a margin in the low triple digits.
Rohr said he expected the Singapore plant to re-open at some point, but he did not give an expected date.
“I don’t think that plant’s going to be down forever, but we’d like to see that market improve a bit,” Rohr said.
Major US acetic acid sellers include BP, Celanese and Eastman Chemical.
($1 = €0.76)
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