Propylene price hike has claimed another victim- Cytec Industries has slashed production rates by 25% at its 227,250 tpa Fortier plant in Louisiana. Cytec has exited out of the spot market until customers are willing to pay more for material or raw material costs subsided. In a bid to cope with record high input costs, ACN prices have already been hiked by 46% by the company in Q2 - devastating market demand. Following last weeks decision to slash operating rates by 30%, Ineos has announced yet another 10% scaling back of operations. Inability to cope with lofty feedstock costs on one hand and eroding demand on the other, Ineos now operates its ACN plant at 60% capacity. A 10 cents/lb increase for July propylene brought squeezed producers' margins to the breaking point. Ineos also plans to further reduce production at its 460,000 tpa Green Lake plant in Texas and its 200,000 tpa Lima line in Ohio. Demand continues to wane as the US economic slump keeps downstream demand sluggish from acrylic fibre (AF) plants that have reduced runs or shut down, and from acrylonitrile-butadiene-styrene customers.
Other Acrylonitrile plants that have hiked offers and reduced production rates include Japan's Asahi Kasei Corporation, South Korea's Tongsuh Petrochemical Co. and Taekwang Industrial Co. and China's PetroChina Jilin Petrochemical Co.
Asahi Kasei has hiked August shipment offers by US$130/MT from the July level. Tongsuh Petrochemical has announced a 10% reduction in operating rates at its 270,000 tpa CAN plant at Ulsan. Two of PetroChina Jilin Petrochemical Co's CAN plants have been operating at 50% capacity- mainly due to transport curbs prior to and during the Beijing Olympics.