06 May 2013 06:59 [Source: ICIS news]
TAIPEI (ICIS)--Taiwan’s Formosa Chemical & Fibre Corp (FCFC) plans to cut production of purified terephthalic acid (PTA) further in June because of squeezed margins, a company source said on Monday.
The price spread between PTA and feedstock paraxylene (PX) is currently about half of the ideal $100-130/tonne (€76-99/tonne) level for PTA producers to generate margins.
On Monday, spot PTA prices were at $1,040-1,045/tonne CFR (cost and freight) China Main Port (CMP), while PX was at $1,450-1,490/tonne CFR CMP, according to ICIS data.
“Given such poor margins, we would rather sell more PX rather than PTA to minimise losses,” the FCFC source said.
The company has three PTA units in Taiwan, one of which is shut indefinitely.
The company intends to take a second unit off line in June, the source said.
Its 550,000 tonne/year No 2 PTA unit in Mailiao has been idle since 26 April, with no restart date fixed, the source said.
FCFC’s 700,000 tonne/year No 3 PTA unit at Loong-der that just completed a six-day shutdown from 25 April for minor maintenance, will be shut for turnaround for a longer period from late June, the source said.
“The turnaround was planned earlier in the year for around three weeks, but we will prolong the shutdown to around four weeks because of poor margins,” the source said.
The company’s 550,000 tonne/year No 1 PTA unit in Mailiao is currently running at full capacity, after being idle from early April to 22 April, the source said.
The production cutbacks will lead to a reduction of PTA available for exports to China, to which FCFC ships out a monthly volume of around 40,000 tonnes, the company source said.
($1 = €0.76)
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