Shenhua Chem extends Nantong SBR shutdown

17 July 2006 10:35  [Source: ICIS news]

SINGAPORE (ICIS news)--Shenhua Chemicals, the Chinese producer, will extend the turnaround of its styrene butadiene rubber (SBR) plant by another week due to skyrocketing butadiene prices, a company source said on Monday.

The 170,000 tonne/year plant at Nantong, Jiangsu province, was scheduled to restart in late July after the shutdown. However, this has now been delayed to early August.

“Our margins have been badly squeezed as SBR prices in China have fallen by more than $100/tonne the past month, while butadiene prices have risen sharply in the past month,” he said.

Butadiene spot offers have increased by $150/tonne in the past month to $1,500-1,550/tonne CFR Northeast Asia, fuelled by robust demand and tight supply.

A recent spate of unexpected outages in Asia, Europe and the US has dried up deep-sea supply to Asia. The tight market is expected to be further restricted in the months, given that several crackers in Asia and Europe are scheduled to shut down from August to November for turnarounds.

Taiwan’s China Petroleum Corp (CPC) will shut down it No 5 cracker for 40-45 days from early August, while two large crackers in Moerdijk in the Netherlands and Lavera in France will shut in September and October.

In the US, olefins producers were said to be cracking lighter feeds, thus yielding less crude C4 and butadiene. Huntsman’s force majeure following a fire that broke out at its site on 29 April also disrupted supply in the US.

Buyers have been scrambling to secure spot material to build up stocks ahead of the upcoming shutdowns, further driving spot prices upwards.


By: Helen Yan
+65 6780 4359



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