S Korea PP op rates rise after Q4 ’08 inventory draw downs

08 January 2009 09:41  [Source: ICIS news]

SINGAPORE (ICIS news)--South Korean polypropylene (PP) producers Honam Petrochemical, Polymirae and LG Chem have raised their production rates after drawing down their inventories on lower output in the fourth quarter of last year as demand fell markedly due to the global financial crisis, company sources said on Thursday.

Honam raised production rates at its Daesan and Yeosu facilities, which have a total capacity of 930,000 tonnes/year, to 95% early this week, after running them at 80-90% in December, a company source said.

Polymirae has been running its four plants at Yeosu, which have a total capacity of 600,000 tonnes/year, at 100% since restarting one of the lines on Wednesday, a company source said.

LG Chem’s 280,000 tonne/year PP plant at Daesan had been running at 100% after completing a five-day turnaround in December, a company source said.

However, two other South Korean producers, Korea Petrochemical Industry Co and SK Energy, continued to produce at lower rates, as demand in Asia was still weak and therefore full operating rates could not be justified, company sources said.

SK Energy’s No 1 183,000 tonne/year PP plant at Ulsan has been running at 80% since resuming production in early January, and its No 2 193,000 tonne/year PP line at the same site has been running at 80% since December, a company source said.

Korea Petrochemical Industry Co’s 350,000 tonne/year plant at Ulsan has been running at 90% since December, a company source said.

Samsung Total Petrochemicals, GS Caltex and Hyosung Corp, which have a combined capacity of 1.05m tonnes/year, did not cut production even when demand weakened significantly after the global financial crisis unfolded in September last year, company sources said.

South Korea’s PP industry comprises eight producers with a combined capacity of over 3.5m tonnes/year, of which around 50% is used for exports.

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By: Chow Bee Lin
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