28 June 2012 11:24 [Source: ICIS news]
SINGAPORE (ICIS)--Four out of the six purified terephthalic acid (PTA) producers in South Korea said on Thursday they will continue to cut production in July by 15-30% because of poor economics.
PTA production costs in June were at an estimated $990-1,010/tonne (€792-808/tonne), while average spot PTA prices have been around $940-950/tonne in the past four weeks, leaving producers with negative margins, according to industry estimates.
Samsung Petrochemical is targeting a 30% cut in output for July and said it would shut its 400,000 tonne/year No 1 PTA plant on 3-4 July, until the end of the month, a company source said.
KP Chemical and Taekwang Industrial said they would maintain their plants’ current run rates of around 80% in July, in a bid to reduce their margin losses.
KP Chemical runs two PTA plants at Ulsan, with a total capacity of 930,000 tonnes/year, while Taekwang Petrochemical operates a 1m tonne/year plant at Ulsan.
Sam Nam Petrochemical has idled its two terephthalic acid plants, with a capacity of 700,000 tonnes/year, on 18 June. The shutdown is expected to last until the end of June.
“We’ve decided on around 15-20% production cutbacks in July, but the detailed plan is still under discussion,” said a company source from Sam Nam.
The company runs four terephthalic acid plants at Yeosu, with a total capacity of 1.8m tonnes/year.
The other two producers, Hyosung Petrochemical and SK Petrochemical, have no plans so far for additional production cutbacks in July, but the two producers said they would keep monitoring feedstock paraxylene (PX) prices.
Hyosung Petrochemical has been running its 420,000 tonne/year Ulsan PTA plant at a low rate of around 85% of capacity since the middle of June because of mechanical issues, a company source said.
SK Petrochemical’s 510,000 tonne/year terephthalic acid plant is running at full rates, a company source said.
($1 = €0.80)
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