S Korea’s Sam Nam idles terephthalic acid unit on bad margins

06 August 2012 10:24  [Source: ICIS news]

SINGAPORE (ICIS)--South Korea’s Sam Nam Petrochemical shut its 350,000 tonne/year No 1 qualified terephthalic acid (QTA) plant in Yeosu on 4 August because of persistently negative margins, a company source said on Monday.

“We decided to idle the unit for one month to minimise our margins losses,” the source said.

PTA margins have been further squeezed since the middle of July as prices of feedstock paraxylene (PX) surged.

Spot PX prices stood at $1,406/tonne (€1,139/tonne) CFR (cost & freight) China Main Port (CMP) in the week ended 3 August. The PX price translates to feedstock cost of $928/tonne for PTA production, according to ICIS.

PTA prices were assessed at $991-1,006/tonne CFR CMP for the same week, ICIS data showed.

The PTA-PX spread has narrowed to $70/tonne, far less than the break-even spread of around $130-150/tonne for most of Asian PTA producers.

Meanwhile, Sam Nam Petrochemical has maintained reduced operating rates of around 90% at its other three terephthalic acid units in Yeosu – including two qualified terephthalic acid (QTA) units and one purified terephthalic acid (PTA) unit – with a combined capacity of 1.45m tonne/year.

The company expects its total output in August to be down by 30,000 tonnes, representing 20% of its full-month capacity, the source said.

($1 = €0.81)

By: Becky Zhang
+65 6780 4359

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