S Korea's HC Petrochem announces further cuts in aromatics run rates on weak PX margins

13-Aug-13

South Korea's HC Petrochem has further cut runs at its No 2 aromatics plant at Daesan to 80%, due to weak production margins for paraxylene, as per Platts. The company first cut the run rate at the No. 1 unit to 90% from 100% on August 1 due to weak margins, further reducing it to 80% on August 9. The lower rate could be in place until the margin improves. The No. 2 aromatics plant, which began commercial operations January 8, is able to produce 800,000 tpa of PX and 120,000 tpa of benzene. For HC Petrochem to break even, the PX/isomer-MX spread must be US$250/mt, the official said, slightly higher than the typical breakeven level of US$230/mt for other unintegrated PX producers. The PX/isomer-MX spread on a CFR Taiwan basis was last assessed August 7 at US$197.50/mt, according to Platts data, after falling to an 11-month low of US$189.50/mt on July 24. “If the PX-MX spread does not improve going forward, we would likely reduce run rates further; we consider all possibilities," as per a company official.