The startup of the plant was initially planned for early 2010, but was delayed several times, possibly due to poor margins for Asian PA producers this year.
PA producers typically need to achieve a premium of $50-100/mt over feedstock orthoxylene to break even.
But according to Platts published price assessments, the PA CFR Far East Asia benchmark since January 3 this year has commanded a premium of only $10-60/mt over the OX CFR China benchmark. Both benchmarks are assessed on a weekly basis.
Jiangsu Sanmu already operates another 50,000 mt/year PA plant and a downstream 40,000 mt/year dioctyl phthalate plant at the same location. It was not immediately clear what the current operating rate of the older PA plant is, but the DOP plant is understood to be running at near full capacity.
The expansion in PA capacity doubles the producer's monthly requirement of feedstock OX to 8,000 mt, given that both plants are running at full capacity.
However, Jiangsu Sanmu has a high inventory level of OX at the moment and is not looking to buy any more this week, the source added.
The CFR Far East Asia PA price was assessed at $980/mt August 26, while the CFR China OX price was assessed at $983/mt August 27.
China Chemical Weekly: http://news.chemnet.com/en/detail-1411716.html
