Dubai (Platts)--17Dec2012/535 am EST/1035 GMT
The spread between phthalic anhdride and its feedstock orthoxylene hit hit its widest for 15 months in China last Friday, after OX prices rose at a much steeper rate than PA. Platts assessed PA at $1,440/mt CFR China last Thursday and OX at $1,557/mt CFR China last Friday. The PA/OX spread, which compares PA and OX prices on a CFR China basis, stood at $117/mt on Friday. PA's discount to OX has not been wider since it hit $135/mt in early September the last year. According to Platts calculations, the margin for a PA producer, based on a production cost of $150/mt in China, stood at $189/mt last Friday. Article continues below...Request a free trial of: Asian PetrochemicalscanAsian Petrochemicalscan provides weekly market updates, commentary and assessments ranging from naphtha feedstocks to aromatics, olefins, and polymers in Southeast Asia, Korea, Taiwan and Japan.
The spread between phthalic anhdride and its feedstock orthoxylene hit hit its widest for 15 months in China last Friday, after OX prices rose at a much steeper rate than PA. Platts assessed PA at $1,440/mt CFR China last Thursday and OX at $1,557/mt CFR China last Friday. The PA/OX spread, which compares PA and OX prices on a CFR China basis, stood at $117/mt on Friday. PA's discount to OX has not been wider since it hit $135/mt in early September the last year. According to Platts calculations, the margin for a PA producer, based on a production cost of $150/mt in China, stood at $189/mt last Friday.
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Asian Petrochemicalscan provides weekly market updates, commentary and assessments ranging from naphtha feedstocks to aromatics, olefins, and polymers in Southeast Asia, Korea, Taiwan and Japan.
"It's clearly unprofitable for a PA producer to sell now," a Chinese producer said. Asian OX was assessed Friday at $1,539/mt FOB Korea, surging $60/mt from a week earlier, and up $61/mt over the same period at $1,557/mt CFR China. Prices climbed early in the week as buyers prepared to stock up amid expectations of limited spot availability in 2013 and bullish feedstock costs. In comparison, PA prices rose $30/mt week on week to $1,440/mt CFR China and $1,465/mt CFR Southeast Asia Thursday, primarily on a push from bullish feedstock OX. Indonesia's Petrowidada will shut its 70,000 mt/year PA plant at Gresik in East Java for a two-week shutdown beginning Tuesday, a company source said Monday. "Part of the reason for a shutdown in high OX prices. It's unprofitable to sell PA now. We will also carry out maintenance at our plant," the source said. A South Korean producer who regularly sells PA into the Asian spot markets said he had not placed an offer for the past week, citing margins. Most of the OX in Asia goes into making PA. PA is mainly used in producing downstream dioctyl phthalate and in the paints industry. --Shashank Shekhar, shashank_shekhar@platts.com--Edited by Alisdair Bowles, alisdair_bowles@platts.com
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