S Korea's Sam Nam Petrochemical QTA unit shut on poor margins

14 November 2012 11:07  [Source: ICIS news]

SINGAPORE (ICIS)--Sam Nam Petrochemical’s 350,000 tonne/year No 1 qualified terephthalic acid (QTA) plant in Yeosu is currently shut because of poor margins, a company source said on Wednesday.

The plant was taken off line on 12 November and is expected to be down for four weeks, the source said.

Sam Nam had originally planned to take the plant unit off line at the end of the month for two weeks of maintenance, but eroding margins have prompted the company to bring forward the unit’s shutdown, the source said.

The unit had undergone a three-week shutdown last month, the source said.

On 14 November, spot purified terephthalic acid (PTA) prices in Asia were assessed at $1,085-1,099/tonne CFR (cost & freight) China Main Port (CMP), while spot PX prices closed at $1,555-1,565/tonne CFR CMP, according to ICIS.

The spread between PTA spot prices and PTA cost has narrowed around $56/tonne (€44/tonne), far less than the breakeven spread of around $130-150/tonne for most of Asian PTA producers.

QTA prices and production cost are $20/tonne lower than PTA, according to a regional trader.

Sam Nam has three other terephthalic acid plants in Yeosu –  a 350,000 tonne/year PTA unit and two 550,000 tonne/year QTA units – that are currently running at 90% of capacity, the company source said.

Sam Nam is a joint venture between Japan’s Mitsubishi Chemical (40%) and South Korean companies Samyang Petrochemical (40%) and GS-Caltex Oil (20%).

($1 = €0.79)

By: Becky Zhang
+65 6780 4359

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