UpdateJapan quake, tsunami kill more than 50, disrupt petchems

11 March 2011 12:20  [Source: ICIS news]

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By Tomomi Yokomura

TOKYO (ICIS)--A massive earthquake and tsunami in northern Japan killed more than 50 people and disrupted petrochemical operations on Friday.

At least 55 people have been killed and over 50 have been reported missing, according to local media reports.

The quake struck Japan’s northeast coast, some 373 km (231 miles) northeast of Tokyo, and 130km east of Sendai, Honshu – the largest island in the country, according to the US Geological Survey (USGS).

USGS earlier put the magnitude of the quake on the Richter scale at 7.9 but revised it up to 8.8, then to 8.9.

It generated a huge tsunami with waves up to 10 metres high, which swept inland destroying buildings and infrastructure.

Countries in the Pacific basin including the Philippines, Taiwan, Indonesia, Papua New Guinea and Hawaii, among others, raised tsunami warnings.

It was the biggest quake Japan has ever recorded, according to Japan’s Meteorological Agency.

Large tsunami has been observed in many parts of northern Japan, Chiba prefecture in the Kanto region and elsewhere, according to the agency.

It was not clear which ports are closed, but the Port of Kobe in Hyogo prefecture in western Japan was operating normally, a port official confirmed on the phone.

Following the quake, fire broke out at the chemical factory of JFE Chemical in the Chuo ward in the city of Chiba, Chiba prefecture, as well as at the 220,000 bpd refinery of Cosmo Oil, located in the city of Ichihara, Chiba prefecture.

No one was available for comment at either company.

JFE Chemical produces coal tar, benzene, toluene and xylene and industrial gases including oxygen, nitrogen and argon.

Chiba prefecture is one of Japan’s petrochemical hubs.

JX Nippon Oil & Energy shut its paraxylene facilities in Kashima, with a combined capacity of 600,000 tonnes/year and in Kawasaki with a combined capacity of 350,000 tonnes/year, market sources said.

Meanwhile, a source close to the company said that three of JX Nippon Oil’s refineries were down - a 145,000 bbl/day unit at Sendai in Miyagi prefecture, a 189,000 bbl/day crude oil refinery at Kashima in Ibaraki prefecture and a 270,000 bbl/day unit at Negishi, Kanagawa prefecture.

None of the major chemical producers including Mitsui Chemicals and Mitsubishi Chemical, which operate chemical plants in Kashima, Ibaraki prefecture, and Ichihara could be reached by phone on Friday night.

The quake and the tsunami that followed downed phone lines and caused power outage in parts of Japan, making it difficult to check on operations of other petrochemical plants.

“It [quake] is a big one this time and quite bad. We don’t know the extent of the damage yet and will have to wait and see. But all petrochemical plants will obviously have to stop operating,” said a trader from Marubeni.

Tokyo Electric Power also shut down its Fukushima Daiichi Nuclear Power Plant (NPP) reactors with capacities of 460 megawatts and 784 megawatts. It also shut its Fukushima Daini reactors with a combined capacity 1.1-gigawatt reactors because of the quake.

The Fukushima prefecture is located near the epicentre of the earthquake.

Stock markets in Asia fell as the natural disaster compounded investors' concerns over unrest in Saudi Arabia.

In China, the Shanghai Composite Index slipped 23.35 points or 0.79% at 2,933.80. In Hong Kong, the benchmark Hang Seng index declined 365.11 points or 1.55% at 23,249.78.

Taiwan’s stock market index was down 75.08 points or 0.87% at 8,567.82.

Japan’s stock market index – Nikkei 225, which closed just after the massive earthquake occurred, also shed 179.95 points or 1.72% at 10,254.43.

The Bank of Japan said in a statement that it will continue to assess the possible impact of the earthquake.

It said it is ready to take action as necessary, including the provision of liquidity, to ensure stability and to secure the smooth settlement of funds, in the coming week.

Crude and naphtha prices also fell as the focus of energy players was temporarily diverted from supply concerns because of ongoing political upheaval in parts of the Middle East and north Africa.

At 09:40 GMT, light sweet crude for April delivery was down 66 US cents at $102.04/bbl, while Brent crude fell $1.52/bbl to $113.91/bbl.

Naphtha prices, meanwhile, plunged below $1,000/tonne (€730/tonne) to $989-991/tonne CFR Japan at the close of trading on Friday, on concerns that cracker operations in Japan had been affected, market sources said.

($1 = €0.73)

Additional reporting by Mahua Chakravarty, Clive Ong, Helen Yan, Felicia Loo, Bohan Loh, James Dennis, Tahir Ikram, Nurluqman Suratman, Becky Zhang and Peh Soo Hwee

By: Tomomi Yokomura
+65 6780 4359

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