INSIGHT: Asia crackers face busy schedule in 2008

30 October 2007 14:31  [Source: ICIS news]

By Steve Tan

 

SINGAPORE (ICIS news)--Asian ethylene prices could spike by the middle of next year if everything does not go according to plan as operators, excluding those in China, brace themselves for a heavy maintenance programme.

 

As seen earlier this year, prices could jump up to 20% within a very short time should the industry face an unexpected technical hitch at a time when supplies would be razor-thin.

 

A total of 18 crackers are down for turnarounds next year and everyone's got their fingers crossed that each one returns to production on schedule.

 

But as a precaution, some cracker operators are opting to turn around their plants just before the peak summer season to avoid a supply crunch and the ensuing price spike which was seen this August.

 

Japan, Asia’s largest olefins supplier, will undergo at least seven naphtha cracker turnarounds in 2008 compared with six this year (see table below).

 

The total turnarounds in Japan could reach eight if Mitsui Chemicals decides to shut its 450,000 tonne/year Osaka cracker.

 

Only one shutdown will include expansion works: Mitsubishi Chemical Co’s Mizushima cracker will start its new furnace adding 150,000 tonnes/year ethylene capacity to the 496,000 tonne/year cracker.

 

Offsetting the tight supply caused by Japan, South Korea’s shutdown schedule is comparatively light. Only two turnarounds have been scheduled in 2008 compared with five this year.

 

Lotte Daesan’s 650,000 tonne/year plant and Korea Petrochemical Industrial Co’s 460,000 tonne/year crackers are scheduled to shut in April and October respectively.

 

However, KPIC’s turnaround could be postponed based on market movements. Lotte Daesan will become Korea’s largest cracker after its turnaround with the addition of 350,000 tonnes/year of new capacity.

 

A major spanner on the olefins balance could come from Taiwan, when Formosa Petrochemicals Co (FPCC) shuts the largest cracker in Asia, the 1.2m tonne/year no 3 unit in Mailiao, more than a year after it was started up.

 

Although FPCC has tank space to store a month’s supply of ethylene, any unexpected shutdown - as seen this year with FPCC’s no 1 cracker - could have a significant impact on the market due to the sheer size of Formosa’s crackers.

 

State-run CPC Corp will also shut two out of three crackers in Taiwan, which would send buyers back to the spot markets. Taiwan is expected to flip back into becoming a net importer during the CPC and FPCC shutdowns.

 

In southeast Asia, a relatively heavy schedule has also been noted, with four-to-five cracker shutdowns slated for 2008, almost on par with this year.

 

Ethylene Malaysia (EMSB) is scheduled for a turnaround in the first quarter but this has not yet been confirmed, and could be postponed.

 

In terms of expansions, Titan Chemicals in Malaysia will add 80,000 tonnes/year to one of its two crackers during a brief shutdown, while Thailand's PTT Chemicals will add 100,000 tonnes of ethylene capacity to its 300,000 tonne/year I-4 no 2 ethane cracker.

 

These additions and those planned by Lotte and Mitsubishi Chemical have given ethylene buyers some hope as they looked to these new supplies to help offset any potential hiccup during the hectic maintenance season.

 

But everyone knows that few crackers come on stream on time, producing on-spec material. So be prepared for a bumpy ride during the summer months. 

 

Operator	Capacity (tonnes/year)	Period – 2008
Idemitsu Kosan, Tokuyama	672,000	Sep-Oct
Maruzen Petrochemicals, Chiba	520,000	May-June
Mitsubishi Chemicals, Kashima 1	375,000	May-June
Mitsubishi Chemicals, Mizushima	496,000	tbc
Mitsui Chemicals, Osaka	450,000	tbc
Nippon Oil Corp., Kawasaki	440,000	Aug-Sep
Sanyo Petrochemical, Mizushima	470,000	Mar-Apr
Tosoh, Yokkaichi	527,000	Mar-Apr
KPIC, S Korea	460,000	Oct
Lotte Daesan, S Korea	650,000	Apr
Formosa No 3, Taiwan	1.2m	45 days, Sep
CPC no 4, Taiwan	385,000	End-Oct
CPC no 5, Taiwan	550,000	Mid-Aug
PTT Chems (NPC), Thailand	460,000	40-days, June-July
PTT Chems (TOC no 2), Thailand	300,000	60 days, Nov-Dec
PCS no 1	475,000	38 days, mid-Jul to end-Aug
EMSB	400,000	Feb-Mar
Titan Chemical	tbc	tbc

 

tbc=to be confirmed

By: Steve Tan
+65 6780 4359

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