S Korea's Samsung Petchem to keep reduced Ulsan PTA output in Oct

25 September 2012 09:51  [Source: ICIS news]

SINGAPORE (ICIS)--Samsung Petrochemical Corp (SPC) will keep reduced production at its Ulsan purified terephthalic acid (PTA) facilities in October because of poor margins, a company source said on Tuesday.

The company has four PTA units with a combined capacity of 2m tonnes/year at the site.

“The overall production cutbacks in October will be around 10-15%,” the source said, adding that the combined run rates at the four PTA units will effectively be at 85-90%.

Towards this end, Samsung Petrochemical plans a nine-day maintenance at its 400,000 tonne/year No 1 PTA plant from 11 October, and a 10-day shutdown at its 450,000 tonne/year No 3 unit at the site from 13 October, the source said.

During the shutdown of the No 1 and No 3 plants, operating rates at the two other PTA plants – a 450,000 tonne/year No 2 unit and a 700,000 tonne/year No 4 plant – will be ramped up to 100%, the source said.

The PTA facilities operated at 85-90% of capacity in August, and at a higher rate of 90% capacity in September because of strong demand from India, the source said.

Samsung Petrochemical is trying to minimise losses by keeping production low given high prices of feedstock paraxylene (PX).

PX prices in Asia were discussed at $1,480-1,485/tonne (€1,140-1,143/tonne) CFR (cost & freight) Taiwan and/or China Main Port (CMP) on 25 September, while PTA prices were at $1,060-1,075/tonne CFR CMP, ICIS data showed.

A tonne of PTA requires 660kg of feedstock PX. This means that PTA makers are incurring a loss of $61/tonne, based on a PX-PTA conversion cost of $150/tonne.

($1 = €0.77)

By: Becky Zhang
+65 6780 4359

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