S Korea’s HC Petrochemical likely to cut No 2 PX run rates by 10-20%

25 June 2013 10:30  [Source: ICIS news]

SINGAPORE (ICIS)--South Korea’s Hyundai Cosmo (HC) Petrochemical is likely to cut operating rates at its 800,000 tonnes/year paraxylene No 2 (PX) unit located at Daesan in July by 10-20% because of squeezed margins, a source familiar with the matter said on Tuesday.

The company will reduce operating rates at its No 2 PX unit as a result of the narrowing gap between feedstock mixed xylenes and PX prices, the source said.

The PX line is part of the company’s No 2 aromatics unit, which can also produce 120,000 tonnes/year of benzene.

Due to the narrowing price gap, the company plans to reduce the run rates, and some contractual volumes might be affected, the source said without further elaboration.

On 24 June, isomer-grade xylene prices stood at $1,178-1,188/tonne (€895-903/tonne) CFR (cost & freight) NE (northeast) Asia, while PX prices were at $1,405-1,410/tonne CFR Taiwan and/or China Main Port, according to ICIS data.

The difference between both products stands at $222-227/tonne, the data showed whereas the ideal difference should be in the range of $250-300/tonne, according to market sources.

“The impact will be largely on the PX products, while there will be minimal impact on benzene,” the source said.

The company will continue to operate its No 1 aromatics unit that has a PX nameplate capacity of 380,000 tonne/year and a benzene capacity of 120,000 tonne/year at full capacity, the source added.

The impact on the PX spot market will be kept at a minimal, as demand and supply situation for the PX sector in July remains balanced-to-long, market sources said.

“It might only be a loss of 1-2 cargoes, and will not likely be able to cause a huge shake up,” a northeast Asia-based trader added.

($1 = €0.76)

By: Samuel Wong

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