News Code : 45114

Petrotahlil - ExxonMobil is planning further cuts its Singapore aromatics output because of squeezed margins and oversupply.

The company is planning to halt production at its Jurong Aromatics Recovery (JAR) site indefinitely from January 2021. JAR, the oldest of three sites that ExxonMobil operates in Singapore, has the capacity to produce 420,000 t/yr of paraxylene (PX), 330,000 t/yr of benzene, 242,000 t/yr of toluene and 206,000 t/yr of orthoxylene (OX).

The JAR shutdown will include an upstream continuous catalytic reforming (CCR) unit. ExxonMobil has already made plans to redeploy workers from the site on mainland Singapore to its various production plants on Jurong Island.

ExxonMobil's No.1 Singapore Aromatics Recovery (SAR) unit was shut earlier this year with no definite date set for production to resume. The company has notified its PX offtakers that term supply volumes will be subject to reallocation from September, without providing any reasons. The No.1 SAR unit on Jurong Island can produce 530,000 t/yr of PX, 580,000 t/yr of benzene and 380,000 t/yr of toluene.

The No.2 SAR unit is operational but likely to be running at reduced rates. The unit on Jurong island was previously owned by Jurong Aromatics (JAC), which ExxonMobil bought in 2017, and is capable of producing up to 800,000 t/yr of PX, 438,000 t/yr of benzene and 200,000 t/yr of OX.

ExxonMobil declined to comment.

PX production margins have fallen below $200/t since late May because of lower demand during the Covid-19 outbreak, an unplanned shutdown at a China-based purified terephthalic acid (PTA) producer and oversupply. The spread between feedstock naphtha and PX has been at around $150/t for the past two months, forcing producers to cut output to stem losses. The spread between benzene and naphtha has also narrowed rapidly since mid-June to below $50/t, amid ample supply and a lack of export demand.

The cfr China/Taiwan PX price was at $540.50/t while the fob South Korea benzene prices was assessed at $447/t on 21 August, according to Argus data. The premium to cfr Japan naphtha prices was at $137/t and at $43/t respectively.

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Source : Argus 

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