LG speeds up ABS startup

18 March 2002 00:00  [Source: ACN]

LG Chem has advanced the target date by which it intends to raise its ABS capacity in China to 500 000 tonne/year by approximately two years.

Originally, it had been the South Korean major's plan to raise its ABS output in the People's Republic from 370 000 tonne/year in 2003 to 500 000 tonne/year in 2006.

However, the target now is to raise capa-city to 500 000 tonne/year in 2004 from 300 000 tonne/year at end-2002.

The startup has been advanced because of the rapid growth in demand and the need to boost competitiveness through greater economies of scale as a result of China's entry to the World Trade Organisation.

LG's current capacity in China is 150 000 tonne/year which will be doubled by the end of this year.

LG Chem also disclosed that the expansion to 500 000 tonne/year may not be at the company's joint venture ABS facility in Ningbo, Zhejiang - LG Yongxing.

In favour of LG Yongxing is the existing infrastructure at the site plus the possibility that acrylonitrile and styrene feedstock could be sourced from Shanghai Secco Petrochemical Co's projects at Caojing, Shanghai.

Against the LG Yongxing further expansion is that demand growth in the southern Chinese provinces of Guangdong and Fujian, is much stronger. As a result, LG Chem is conducting feasibility studies into adding the capacity either at Ningbo or in southern China.

LG Chem estimates that demand in southern China was 940 000 tonne against zero local production in 2001. It predicts that this will rise to 1.23m in 2005 against zero domestic capacity, unless it builds in southern China.

This compares with LG Chem's estimate for eastern China, consisting of Zhejiang, Jiangsu and Shanghai, of 610 000 tonne/year demand in 2001 over capacity of 230 000 tonne/year. Demand is expected to rise to 810 000 tonne/year against local production of 610 000 tonne/year in 2005.

If the decision is made to build in southern China, then butadiene and styrene feedstock could be sourced from Maoming Petrochemical, which has surpluses in both.

Acrylonitrile would have to be sourced from overseas. However, LG Chem argues that the acrylonitrile market will be sufficiently long to make this economical. One potential supplier is Tongsuh Petrochemical in South Korea which is to raise its capacity to 200 000 tonne/year from 130 000 tonne/year in 2003.

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