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Asian PA, DOP producers prepare for tough fourth quarter

September 19/2011

(ICIS) -- Asian phthalic anhydride (PA) and dioctyl phthalate (DOP) producers are preparing for a rough ride as they move into the fourth quarter of this year, industry sources said on Monday.
With such high feedstock orthoxylene (OX) costs, PA producers are losing money with every tonne of material produced, a South Korean producer said.

OX spot prices were assessed at USD 1,575/tonne (EUR1,150/tonne) CFR (cost & freight) northeast (NE) Asia on 16 September, while PA values were at USD 1,460/tonne CFR China Main Port (CMP) on the same day, according to ICIS.

Typically, a tonne of PA is made by using 950kg of OX. A producer then needs to add USD100/tonne to its price to cover conversion costs. Based on the assessed OX and PA prices on 16 September, Asian producers are losing USD 136.25 for each tonne of PA they make.

In India, IG Petrochemicals Limited (IGPL) is keeping the production at its PA plants at 70% of their capacities. IGPL operates two PA lines in Taloja with a combined production capacity of 116,110 tonnes/year.

In China, Shandong Hongxin is operating its three PA lines, with a total production capacity of 120,000 tonnes/year, at 70% of their capacities.

South Koreas Aekyung Petrochemical has lowered the operating rates at its 150,000 tonne/year DOP plant at Ningbo in Zhejiang province to 50% of its capacity as it is unable to obtain sufficient feedstock PA.

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