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Chinas production of PTA to fall in April

March 18/2011

(ICIS) -- Chinas production of purified terephthalic acid (PTA) will fall in April due to heavy turnarounds at plants, with some producers even bringing forward the maintenance schedule, due to limited availability of feedstock paraxylene (PX), industry sources said on Friday. Quake-related disruption to Japan"s PX exports for a week now aggravated the tight supply in the market, causing  price spikes that tugged at PTA values.

Spot PX prices surged to their highest level on record at USD 1.815/tonne (EUR 1.289/tonne) CFR Taiwan and/or CMP on Wednesday, as demand from PTA producers surged following a force majeure declaration on PX supply by Japans JX Nippon Oil & Energy, according to ICIS.

Three of the companys PX facilities, with a combined capacity of 950 KT, have been knocked down by a massive quake and tsunami that hit the northern part of the country on 11 March. Meanwhile, spot PTA prices soared to a 16-year high of USD 1.500-1.517/tonne CFR (cost and freight) China Main Port (CMP) on Thursday, according to ICIS.

Prices will likely continue their uptrend in the coming weeks, as supply will become tight amid a slew of turnarounds in China, as well as in South Korea and Taiwan, market sources said. (Please see table below)

PTA output will be cut by about 264 KT, thereby cutting the requirement for feedstock PX by 177 KT, based on industry estimates.

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