INEOS slashing ACN production at Texas facility due to margins

16 December 2013 16:02 Source:ICIS News

INEOS slashing ACN production at Texas facility due to marginsHOUSTON (ICIS)--INEOS Nitriles is cutting production of acrylonitrile (ACN) at its Green Lake, Texas, facility by 50% of capacity in January due to “unsustainable margins”, the company announced on Monday.

A “significant proportion of capacity” will be idled through the first quarter of 2014, subject to a review of markets, INEOS Nitriles said in a news release.

"Our current position is unsustainable, and we are forced regrettably to take this decision to preserve the long term health of our acrylonitrile business,” said Graham Beesley, commercial director for INEOS Nitriles.

“Given the poor margins that we have experienced in the latter part of 2013, we have little choice but to reduce our production until trading conditions improve,” he added.

The Green Lake plant has a nameplate capacity of 545,000 tonnes/year, according to the ICIS plants and projects database.

INEOS Nitriles has four plants worldwide. Two are in the US - the Green Lake facility and a plant in Lima, Ohio, with the other two in Europe in Koeln, Germany, and Teesside, UK. The Green Lake plant is the company’s largest.

INEOS Nitriles plans to build a fifth plant – to be located in Asia – as part of a joint venture with Tianjin Bohai Chemical Industry Group.

US ACN producers have told ICIS that they are hoping that tighter supply will provide some relief from an extended period of operating at negative to near-break-even margins.

November domestic contract prices for US ACN were assessed by ICIS at 98.77-102.92 cents/lb ($2,177-2,269/tonne, €1,589-1,656/tonne) DEL (delivered) USG (US Gulf), while export prices were at 75.57-77.57 cents/lb FOB (free on board) USG.

ACN spot prices were assessed at 73.25-76.20 cents/lb.

Acrylonitrile is used in the production of synthetic fibres, engineering plastics, carbon fibre, synthetic rubber and water soluble polymers for use by end-use markets such as automotive, textiles and construction.

($1 = €0.73)

By Jeremy Pafford