At least one reformer at the new 400,000 b/d Dalian Changxing refinery in northeast Liaoning province has been operating at reduced rates for the past three weeks because of technical issues.
Repairs on the unit are underway and expected to take a few weeks. It is unclear when normal operations will resume. Operator Hengli Petrochemical has a total reforming capacity of 9.6mn t/yr at the Dalian plant.
The company's 4.5mn t/yr paraxylene (PX) unit at Dalian is running normally.
Hengli may have purchased domestic feedstock isomer-grade mixed xylene (MX) to maintain production at the complex following issues with its reformer, lending support to Chinese MX prices.
Incremental demand for MX from PX units in China have pushed up prices. Hongrun Petrochemicals also started up an 800,000 t/yr PX unit in Shandong province in July. Sinopec Hainan's No.2 1mn t/yr standalone PX unit is expected to begin trial runs at the end of this month.
Strengthening MX prices have also pressured PX production margins. The MX-PX differential was at a multi-year low of $64/t on 3 September. The MX-PX spread hovered above $400/t during the first quarter of the year but has rapidly narrowed to below $100/t since July.
The MX price on a fob South Korea basis is $695/t, while domestic prices in China are at 6,580-6,600 yuan/t ($920-930/t) for prompt cargoes or around $795/t on an import parity basis.
MX demand has mostly come from Chinese gasoline blenders and PX producers looking to stock up on inventories before the national holiday next month, traders said.
