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PX, OX supply expected to tighten in Asia in 2012

December 26/2011

(ICIS) -- Players in the paraxylene (PX) and orthoxylene (OX) markets in Asia are bracing themselves for tight suppy in 2012 amid the bleak economic outlook, as the eurozone continues to struggle with its debt crisis, sources said.

A deluge of new purified terephthalic acid (PTA) plants in China is likely to tip the market in favour of sellers, players said. PTA facilities with a combined capacity of over 9m tonnes/year are expected to commence commercial operations in 2012, while 1.45m tonnes/year of fresh PX capacities is expected within the same period.

For every tonne of PTA produced, 0.67 tonnes of PX is needed.
The PX supply shortage is expected to spill over into the OX market, as regional makers are likely to tilt production yields in favour of PX. OX is typically a by-product during the PX extraction process and can be re-isomerised to maximise PX yields.

The market is tight and will continue to be tight [in] 2012, said a China-based phthalic anhydride (PA) maker. PA is the downstream product of OX and is used mainly in the plasticiser sector.

Term PX shipments for 2012 for delivery into east China were heard concluded at premiums of USD9/tonne (EUR6.93/tonne) to 50% Asian Contract Price (ACP): 50% spot CFR (cost& freight) quotes, while contracts for delivery into southwest China were heard concluded at premiums of USD15/tonne to published quotes over the past three weeks.

Most of these contracts were concluded at parity to published quotes in 2011.

In addition, PTA makers have already reduced their plants operating rates at the end of November to December because of squeezed PX-PTA margins.
If there is no demand for PTA, then there is no reason why we should be operating our plants, said a southeast Asia-based PTA maker.

Author:Anna Larionova
Tags:paraksilol, terephthalic acid.
Category:General News
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