Published on : Jul 02, 2015
Two major purified terephthalic acid (PTA) makers in China- Hengli Petrochemical and Zhejiang Yisheng Petrochemical Co have announced plans to cut on production rate owing to thin profit margins, as commented by sources close to the company.
The announcement made by the two biggest PTA producers in China have led to sharp rise in PTA futures on the Zhengzhou Commodity Exchange. The PTA futures for September contract on the exchange promptly closed at Yuan 5,068/mt.
Prior to the announcement, the domestic Chinese PTA price was at Yuan 4,775/mt but after the announcement it has bounced back to Yuan 4,900-4,950/mt.
As per the announcement, Zhejiang Yisheng Petrochemical Co. has plans to cut down production rates by 80% at two of the company’s plants in Dalian with effect from Thursday, while Hengli Petrochemical also plans to cut 80% production rates at three of the company’s plants also located in Dalian, as told by sources close to the companies.
The two PTA facilities of Zhejiang Yisheng at Dalian have a total capacity of 5.95 million mt/ year- with the individual break-up of the top company having capacity 2.2 million mt/year and the second ranked unit with 3.75 million mt/ year. Both the units of the company were operating at 95% prior to the production cut, as told by sources close to the company.
In the interim, the two PTA plants of Hengli Petrochemicals in Dalian that have total capacity of 4.4 million mt/ year were under operation at almost 100%, and the two new unit of the company having capacity of 2.2 million mt/ year were operating at 90%, as told by company sources.
Zhejiang Yisheng also owns three more PTA units located in Ningbo that have 2 million mt/ year unit capacity, 2.2 million mt/ year unit capacity and 650,000 mt/year unit capacity.