Asian cracker operators face several turnarounds

31 October 2007 05:53  [Source: ICIS news]

By Steve Tan

SINGAPORE (ICIS news)-Asian cracker operators (excluding China) are bracing themselves for a relatively heavy turnaround schedule in 2008 with 18 units slated for maintenance, market sources said on Wednesday.

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

Some cracker operators are opting to turn around their plants just before the peak summer season to avoid a supply crunch, which was seen earlier this August.

The total turnarounds in Japan could reach eight if Mitsui Chemical decides to shut its 450,000 tonne/year Osaka cracker. Only one shutdown will include expansion works. Mitsubishi Chemical’s Mizushima cracker will start its new furnace adding 150,000 tonnes/year ethylene capacity to the 496,000 tonne/year cracker.

“Most Japanese derivatives plants match their shutdown schedule with that of their upstream crackers, causing not so big (a) problem to the regional supply demand balance,” a source with a Japanese derivatives maker said.

The tight supply caused by Japan will be offset by South Korea’s comparatively light shutdown schedule.

Only two turnarounds have been scheduled in 2008 compared to five this year.

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

However, KPIC’s turnaround could be pushed to April based on recent market talk. After the turnaround, Lotte Daesan will become South Korea’s largest cracker, adding 350,000 tonnes/year capacity, but most supplies would be captive, market sources said.

“The shutdown schedule in Japan is especially heavy in the first half of next year, but the exportable ethylene from Korea to Japan will be (less) than this year,” said a South Korean cracker operator.

He cited limited vessel space as one of the possible reasons.

Another major impact on the olefin balances could come from Taiwan as Formosa Petrochemicals (FPCC) shuts the largest cracker in Asia, the 1.2m tonne/year No 3 located in Mailiao, over a year after it was started up.

“It depends on the timing, but yes, I basically thnk it’s a heavy year,” said a Singapore-based olefins trader.

“Especially since Formosa will be shutting down its new cracker,” he said, adding that the shutdown was a mandatory procedure stipulated by the licensor of the cracker.

Although FPCC has sufficient tank space to store a month’s supply of ethylene, any unexpected shutdown such 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 be shutting two out of three crackers in Taiwan, which would send buyers back to the spot markets as the cracker operator has no downstream plants of its own.

Taiwan is expected to flip back into becoming a net importer during the CPC and FPCC shutdowns.

In Southeast Asia, the shutdown schedule is similar to most years, with four-to-five cracker shutdowns for 2008.

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

Ethylene Malaysia (EMSB) could be scheduled for a turnaround in the first quarter but this has not yet been confirmed, a source close to the company said.

Name	Capacity tonne/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	Apr or 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-end Aug
EMSB	400,000	Feb-Mar
Titan Chemical	TBC	TBC

By: Steve Tan
+65 6780 4359

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