China's Fujian Fuhua plans to shut its 4.5mn t/yr purified terephthalic acid (PTA) plant in early March for a 10-day maintenance because of rising inventory.
The coronavirus outbreak in China has limited demand for the fiber intermediate, with the downstream polyester sector lowering operating rates since early February. PTA is on course to be oversupplied by more than 400,000t this month, based on current trends.
Logistics restrictions have also affected PTA consumption in the past few weeks. Cargo transportation has eased recently in several provinces but will take some time to return to normal levels.
This is the second round of production cutbacks at Fujian Fuhua, which lowered operating rates from 90pc to 60pc on 9 February.
Fuhua's sister company Fuhaichuang Petrochemicals may restart one of its two 800,000 t/yr paraxylene (PX) units at the end of February. Fuhaichuang lowered operating rates to around 50pc in mid-December and then shut both lines totally in early January amid lower margins.
The feedstock naphtha-PX spread has stayed around $250-260/t cfr for the past two months, which can be negative for standalone PX producers. But the benzene-naphtha spread has strengthened amid tight supply, which has helped overall margins turn slightly profitable.
