Poor margins force China Yisheng to reduce run rates of PTA for a month

22-Nov-11

Yisheng Petrochemical will shut a 650,000 tpa line at Ningbo from December 15 to January 15 due to negative margins, as per Platts. Yisheng Ningbo comprises three PTA lines, two of which can produce 650,000 tpa each, and the third 2 mln tpa. Separately, it will reduce output at its 2 mln tpa Dalian plant by 20,000 tons in December and another 20,000 tons in January, equivalent to a 12% cut in production rate. Domestic PTA prices are around Yuan 8,100/mt (US$1030/mt on an import-parity). But feedstock PX was assessed at US$1396/mt CFR Taiwan/China. Based on a conversion factor of 0.66 and a conversion cost of $150/mt, this means that PTA makers must break even at $1,071/mt. PTA has been under pressure from high feedstock prices and poor demand from polyester makers.