Shandong Bohui achieves on-spec adipic acid

30 January 2008 08:45  [Source: ICIS news]

SINGAPORE (ICIS news)--Shandong Bohui has achieved on-spec adipic acid production at its new plant in Zibo City which began trial runs early this month, a company source said on Wednesday.

“We are offering products from line No 1 now that they have met the right standards. We are capable of running the unit at 80% now,” he added.

The 150,000 tonne/year Zibo city plant, which has two lines of 75,000 tonne/year each, is in Shandong province in the north.

“We plan to start up line No 2 in May this year,” the source added.

The supply from Bohui is likely to exert considerable downward pressure on prices when the market resumes active trading after the Chinese New Year holidays in early February, sellers and buyers said.

They added that the company was unlikely to start up line No 2 in the second quarter as planned, as demand would not be strong enough to absorb the additional supply.

“The company is now targeting a production rate of about 200 tonnes/day for the first line which will provide more competition, in particular for the European and US adipic producers,” a major producer said.

“Bohui is unlikely to ramp up the production rate to 80% now because of the current power shortage and poor weather in China, besides the upcoming holiday season,” a trader said.

Prospects for other adipic producers already look bleak for the second quarter.

Excess supply due to high import volumes had resulted in a weak market last year, sellers said, citing Chinese customs import figures.

China imported 279,900 tonnes of the material last year, a 100,000-tonne increase from 2006, they added.

Adipic acid, a benzene derivative, is a feedstock for polyurethane (PU), engineering plastics and nylon 6,6.

Shandong Bohui also produces epichlorohydrin (ECH), polyvinyl chloride (PVC) and vinyl chloride monomer (VCM).

By: Hsin Hun Wan
+65 6780 4359

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