Slight delay to Nan Ya's MEG startup

26 June 2007 04:03  [Source: ICIS news]

SINGAPORE (ICIS news)--Nan Ya Plastics targets to supply the first cargo from its new 700,000 tonne/year monoethylene glycol (MEG) plant at Mailiao, Taiwan, in the later part of July, sources close to the company said on Tuesday.

The expected start marks a slight delay from the original date of end-June or early July.

“The plant is undergoing test runs now, and on-spec production is not an issue,” said one of the sources, who added that the company hopes to start delivering cargoes from the new plant in the latter half of July.

“We don’t see any serious delay and so far, we’re adhering to the environmental [regulations] and if all goes well and all permits are granted soon, sales can start in the [latter half of] July,” confirmed a second source.

Company officials declined comment and none of the sources could explain the delay of almost two weeks. But market rumours circulated that the plant had yet to pass all environmental checks for it to start commercial production.

“All of the [Nan Ya] officials I know refused to comment on the environmental checks,” said the second source.

A third source said that “as far as I know”, feedstock ethylene had been fed into the plant over the weekend of 23-24 June. He added that the company had started making allocations to their agents and contract customers for delivery in the second half of July.

Nan Ya’s MEG plant would be the largest single-line unit in Asia upon startup. Commercial production had been postponed several times since 2006, which had indirectly helped to keep MEG prices on an uptrend for the most of this year.

As of Monday, spot MEG prices were at $935-940/tonne CFR (cost and freight) China, unchanged from last Friday’s closing levels. Buyers and sellers in general expect Nan Ya’s startup in July to at least dent sentiment and weigh down prices between mid-July and mid-August.

By: Salmon Aidan Lee
+65 6780 4359

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