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Oriental phthalic anhydride margins struck a five-year high on strong end-year demand for DOP
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Phthalic anhydride margins surged to a five-year high of $131/mt CFR China last Friday after an end-year rise sought after for PA to make dioctyl phthalate.
The last time margins were higher was June 21, 2012, at $154/mt CFR China, S&P Global Platts information revealed.
Daily Chemicals is made from orthoxylene and its breakeven is calculated as 0.95 of the pertinent cost of OX plus $100/mt production expenses, placing the minimal spread to OX for PA manufacturers to recover cost at $105.30/ mt.
Margins have actually been mostly in adverse region given that the last quarter of 2012 as well as flipped to favorable only last October, Platts information revealed.
Market individuals associated the flip to favorable to strong demand for PA in late 2016 to make downstream DOP amid expectations of an increase in DOP costs at the end of the year. Reduced PA inventories were also mentioned as an element.
Naphthalene-based PA plants in China cut operating rates in the 2nd half of last year amidst a clampdown on adherence to ecological policies in advance of the G20 summit in Hangzhou, exacerbating already limited supply.
Naphthalene is a different feedstock used to make PA that is usually chosen as it is cheaper than OX.
OX rates rose last October in the middle of the strong need for PA as well as remained to rise throughout the fourth quarter in the middle of stockpiling ahead of the Lunar New Year holidays.
OX was assessed at $820/mt CFR China last Friday, up from $705/mt at the end of September.
Margins for are anticipated to continue to be favorable in the very first quarter of 2017 as demand remains solid and no new plants are because of come online in the coming months. Nevertheless, need for DOP has softened to day in January from the December optimal.
Margins may additionally be toughened up by consistent production at Singapore's Jurong Aromatics Facility, which has a PA production capability of 200,000 mt/year, in the first fifty percent of 2017.
The complex was closed in December 2014 and also resumed operations in July in 2015.
The last time margins were higher was June 21, 2012, at $154/mt CFR China, S&P Global Platts information revealed.
Daily Chemicals is made from orthoxylene and its breakeven is calculated as 0.95 of the pertinent cost of OX plus $100/mt production expenses, placing the minimal spread to OX for PA manufacturers to recover cost at $105.30/ mt.
Margins have actually been mostly in adverse region given that the last quarter of 2012 as well as flipped to favorable only last October, Platts information revealed.
Market individuals associated the flip to favorable to strong demand for PA in late 2016 to make downstream DOP amid expectations of an increase in DOP costs at the end of the year. Reduced PA inventories were also mentioned as an element.
Naphthalene-based PA plants in China cut operating rates in the 2nd half of last year amidst a clampdown on adherence to ecological policies in advance of the G20 summit in Hangzhou, exacerbating already limited supply.
Naphthalene is a different feedstock used to make PA that is usually chosen as it is cheaper than OX.
OX rates rose last October in the middle of the strong need for PA as well as remained to rise throughout the fourth quarter in the middle of stockpiling ahead of the Lunar New Year holidays.
OX was assessed at $820/mt CFR China last Friday, up from $705/mt at the end of September.
Margins for are anticipated to continue to be favorable in the very first quarter of 2017 as demand remains solid and no new plants are because of come online in the coming months. Nevertheless, need for DOP has softened to day in January from the December optimal.
Margins may additionally be toughened up by consistent production at Singapore's Jurong Aromatics Facility, which has a PA production capability of 200,000 mt/year, in the first fifty percent of 2017.
The complex was closed in December 2014 and also resumed operations in July in 2015.
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