Mizushima Aroma Co, a joint venture of Mitsubishi Gas Chemical and Toyobo, both of Japan, plans to phase out its 260,000 t/y production of polyester feedstock PTA by the end of the 2015 first quarter.

The company is also seen as likely to close its 250,000 t/y paraxylene (PX) plant at Kurashiki, which is operated by the joint venture with JX Nippon Oil, Mizushima Paraxylene.

Mizushima's motivation for shutting the units undoubtedly reflects the paraxylene supply agreement recently signed by Mitsubishi Chemical and China National Offshore Oil Corporation (CNOOC). This foresees the company's drawing PX for its 600,000 t/y Chinese PTA production via pipeline from the CNOOC's more than 1 million t/y refinery due to go on stream at Ningbo, China early next year.

Due to the build-up of surplus capacity in China, Mitsubishi's PTA production has slipped into the red. The Japanese chemical producer already has hinted at shutting its facilities in South Korea when the pipeline is in operation.

Together with four Chinese companies, Mitsubishi Chemical, with PTA sales of $2.73 billion, is world's second largest producer of PTA, behind the UK's BP.