Taiwan’s Formosa restarts ECH unit ahead of schedule

20 September 2010 10:54  [Source: ICIS news]

SINGAPORE (ICIS)--Taiwan’s Formosa Plastics Corp has restarted its 100,000 tonne/year epichlorohydrin (ECH) unit in Mailiao, Taiwan, slightly earlier than planned due to tight supply of the material in the region, a company source said on Monday.

The plant came on stream this weekend after it was taken off line for a scheduled maintenance on 28 August, the source said, adding that the shutdown, which was expected to last for a month was shortened in view of the tight supply of ECH in the region.

“The supply will still be limited as we do not have many cargoes to offer. We continue to receive buying enquiries from China and will begin negotiations later this week,” said the source. Offers were cited at $2,200/tonne (€1,694/tonne) FOB (free on board) Taiwan.

Meanwhile, a spot Asian ECH October cargo (300-500tonnes) was heard fixed at around $2,285/tonne CFR (cost & freight) southeast Asia on Monday.

Asian ECH spot prices jumped $30-50/tonne this week to $2,200–2,250/tonne CFR (cost & freight) China this week, propped by higher offers amid tight supply throughout the region.

Some suppliers were targeting $50-100/tonne increase in prices for October shipments at and above $2,300/tonne CFR China Main Port (CMP) although buyers were resistant to such price hikes.

Buying ideas were largely located at around $$2,200/tonne CFR CMP but offers below $2,250/tonne CFR CMP were hard to locate.

Spot prices of ECH were on an upturn this week amid tight supply and a rebound in Chinese domestic prices as regional producers hiked offers in view of tight supply and poor margins, traders said.

Upcoming turnarounds at some plants in China would further exacerbate the existing supply crunch, the source added.

A key Chinese ECH producer, Shandong Bohui Chemical, has shut one of its three lines due to wastewater treatment issues in early September, company sources said. Each of its three lines has a capacity to produce 80,000 tonnes/year.

ECH producer Shandong Zhonghai Fine Chemical plans to shut its 40,000 tonne/year ECH unit in late September for 15 days, company sources said.

($1 = €0.77)

With additional reporting by Yi Jing in Shanghai

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By: Saru Thukral
+44 208652 3214

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