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The critical spread between paraxylene as well as feedstock naphtha expanded by $42.40/ mt, or 12%, year on year from approximately $353.30/ mt in 2015 to $395.70/ mt in 2016, according to S&P Global Platts data.

The spread was widest at $452.17/ mt on August 5, a level not seen given that August 19, 2014, when it was $468/mt.

The spread balanced $361.30/ mt in 2014.

Integrated PX manufacturers require a spread of $200-300/ mt for breakeven, depending upon the plant's dimension, age and also various other variables.

The main factor for the wider spread in 2016 was expansion in downstream detoxified terephthalic acid ability in China as well as reduced naphtha rates, sources from South Oriental PX manufacturers stated.

China Prosperity Jiangyin Petrochemical, also called Hanbang Petrochemical, began its brand-new 2.2 million mt/year PTA plant at Jiangyin in the eastern Jiangsu district last March.

"For 2016 there was only PTA expansion, no PX development. Balancewise, [there was] more demand from the PTA [field]," said a source with a South Oriental PX producer.

Meanwhile, chemicals used in water treatment between CFR Taiwan/China PX and FOB Korea isomer-MX expanded 4.8% year on year to average $147.03/ mt in 2016. Unintegrated PX manufacturers have actually formerly suggested that a spread of $160-$180/mt was needed for breakeven.

Contributing to a limited widening of the spread was brand-new supply in the form of 3 new MX plants in Japan as well as South Korea, with the startup of Hyundai Chemical's 1 million mt/year facility in late October.

The PX-toluene spread likewise broadened by $20.20/ mt, or 11.1%, year on year to typical $202.60/ mt in 2016.

A PX producer explained the calculation of the breakeven level for the PX-toluene spread as "complicated" as it relies on the spread with various other items such as benzene.

Toluene is normally utilized as a feedstock in toluene disproportionation units to generate benzene and xylenes, of which the last is even more divided to create PX.

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