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The supply of orthoxylene in Asia is likely to remain tight over the next few months

May 05/2011

(ICIS) -- The supply of orthoxylene (OX) in Asia is likely to remain tight over the next few months because of cutbacks in production rates amid soaring feedstock isomer-grade xylene (IX) prices, sources said on Thursday.


Key OX makers in South Korea said they will scale back on production rates to limit their losses. South Koreas SK Chemical Global said it will cut operating rates at its two100 KTa OX units at Ulsan, but declined to disclose further details on the extent of the reduction.


SK Chemical Global has since been actively bidding for spot OX to make up for any shortfalls in meeting contractual obligations.


KP Chemical said it has halved operating rates at its Ulsan-based unit with a combined nameplate capacity of 230,000 tonnes/year because of eroded margins.


In Taiwan, CPC and Formosa Chemical and Fibres Corp (FCFC) have ceased their exports of spot OX since the middle of April. They will focus their production efforts on paraxylene (PX), which is the more lucrative commodity at present, they said.


The demand for the material may ease towards the third quarter of the year when JX Nippon Oil & Energy is expected to restart its production facilities at Sendai and Kashima. The facilities were damaged in the earthquake and tsunami that rocked Japans northeast region on 11 March.


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