Market sources in South Korea told SSESSMENTS.COM that Hanwha General Chemical and Lotte Chemical had signed an agreement on the supply of paraxylene (PX) and purified terephthalic acid (PTA). Under the deal, Lotte Chemical will provide Hanwha General Chemical with 300,000 tons/year of feedstock PX starting from July. In exchange, Hanwha General Chemical will provide Lotte Chemical with 450,000 tons/year of PTA.
Lotte will use the PTA supply for its downstream polyethylene terephthalate (PET) bottle chip production. Lotte has been reducing its own PTA output and instead, focusing on its purified isophthalic acid (PIA) production. In November, Lotte converted its 600,000 tons/year No.3 PTA unit to produce 380,000 tons/year of PIA, adding its PIA capacity to 840,000 tons/year, the largest in the world.
Meanwhile, Hanwha General Chemical operates four PTA lines in Ulsan and Daesan with a combined capacity of 2 million tons/year, the largest in South Korea. As SSESSMENTS.COM noted, Hanwha has idled its No.2 PTA unit in Ulsan since November due to weak export demand. It will likely restart the unit after securing the deal with Lotte.
