Japan Energy cuts benzene op rates by 30-40%

26 February 2008 10:11  [Source: ICIS news]

SINGAPORE (ICIS news)--Benzene producer Japan Energy is running its Chita-based benzene plant at 60-70%, its lowest operating level, due to poor economics, a company source said on Tuesday.

The plant had been running at 100% at the beginning of the year, he added.

Japan Energy produces 200,000 tonnes/year of benzene, which is mainly used for downstream cyclohexane production at its 220,000 tonne/year plant.

It also produces 200,000 tonnes/year of toluene and 250,000 tonnes/year of isomer grade xylene, which is channelled to the company’s 380,000 tonne/year paraxylene (PX) plant.

High feedstock naphtha values since the last quarter of 2007 have forced a number of Japanese and Korean operators to mull or implement cutback in operating rates.

Current naphtha values at about $900-903/tonne (€603-605/tonne) CFR (cost and freight) Japan and Asian benzene values at $1,095-1,105/tonne FOB (free on board) Korea ensured that the spread was comfortably wide at $195-202/tonne.

“But due to poor margins with toluene and xylenes, we cannot run the plant fully,” the source said.

Asia toluene prices were being discussed on Tuesday only $55-67/tonne higher than naphtha at $955-970/tonne FOB Korea.

Isomer grade xylene prices were notionally assessed at $955-975/tonne FOB Korea, $55-72/tonne above naphtha values.

The market estimated a spread of about $150/tonne between naphtha and BTX as the variable production cost.

The source also confirmed that the company’s two other lines at Mizushima and Kashima were running normally.

Other key Japanese benzene producers are Nippon Oil and Taiyo Oil.

For more on benzene visit ICIS chemical intelligence

ICIS Copyright © Reed Business Information 2009

Author: Mahua Chakravarty
+65 6780 4359

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