Japan's JXTG Nippon Oil & Energy plans to further cut its aromatics production to a 70pc operating rate next month, prompted by negative margins for paraxylene (PX).
PX production margins fell to a more than a five-year low of $225/t at the end of November, averaging $252/t from November to 10 December, according to Argus data. The typical breakeven for PX is around $280-330/t, so most producers have suffered as the naphtha-PX differential fell below $250/t.
PX supplies will rise further with new Chinese production capacity scheduled to come on line by the end of the year.
JXTG has already lowered operating rates to 80pc since May amid squeezed margins for benzene, as well as PX. The spread between naphtha and benzene rebounded to a breakeven of $150/t this week, although it was also in negative territory at $100/t during November.
JXTG operates 11 PX units across Japan with a combined nameplate production capacity of 3.12mn t/yr of the fiber intermediate feedstock. It also has a 50pc stake in the 1mn t/yr Ulsan Aromatics (UAC) complex in South Korea, a joint venture with SK Global Chemical. The company also has 1.95mn t/yr of benzene production in Japan, as well as offtake of 300,000 t/yr from UAC.
By Suzi Shin
