The production margin for spot purified terephthalic acid hit a six-month high Wednesday following a sharp drop in feedstock paraxylene prices, but this still failed to lift the margin out of the red, Platts data showed.
The PTA margin on Wednesday was at minus $49.55/mt -- the highest level since July 11, 2012 -- and early Thursday, the margin was hovering around the same level.
The CFR Taiwan/China PX benchmark slid $26.50/mt day on day to be assessed at $1,667.50/mt Wednesday on increased supply, after South Korea's HC Petrochemical started on-spec PX production from its new 800,000 mt/year PX plant at Daesan.
On the other hand, the drop in PTA prices was limited, at $9/mt day on day, to be assessed at $1,201/mt CFR China on the back of tight supply.
PX supplies have also increased on lower PTA plant operating rates. For example, in China, Shaoxing Yuandong's 1.4 million mt/year PTA plant has been shut since November due to negative margins, Platts previously reported. The company currently has no plans to restart the PTA plant. Shaoxing Yuandong has another three PTA lines which have a combined capacity of 1.8 million mt/year.
Market sources said the Asian PX market would likely continue its downtrend amid rising supply. In the first quarter of this year, Dragon Aromatics plans to start up its new 800,000 mt/year PX plant at Gulei, Fujian province.
