17 March 2011 01:13 [Source: ICIS news]
HOUSTON (ICIS)--The Dow Jones Industrial Average fell by more than 2% on Wednesday as fears of a nuclear meltdown in Japan grew.
The nuclear crisis escalated after a series of explosions at the Fukushima Daiichi complex, as cooling systems failed following the 9.0-magnitude quake and resulting tsunami.
Operators at the Fukushima Daiichi site said they would try again on Thursday to use helicopters to pour water on the reactors in an effort to cover the fuel rods in the nuclear reactors, according to press reports.
The Dow Jones closed down 242.12 points, to 11,613.30 after US Nuclear Regulatory Commission chairman Gregory Jaczko told a Congress subcommittee that one reactor’s cooling pool may have run dry, while EU Energy Commissioner Guenther Oettinger said the reactor site was “effectively out of control”, according to press reports.
Shares for Dow Chemical fell 2.22% to $35.16; DuPont fell 1.66% to $51.53, while LyondellBasell fell 0.5% to $38.09.
Engineers have been working frantically to pump seawater into nuclear reactors at the Fukushima plant in an effort to stabilise their temperatures and prevent a full-scale meltdown. The first in a series of explosions occurred at the plant on Saturday 12 March.
The nuclear plant's operator said it was nearing completion on a new power line to enable pumps to provide water to the reactors, according to press reports.
Many refineries and petrochemical plants in the region have been forced to shut since last Friday, in turn causing a domestic shortfall in fuel, power and feedstocks.
US chemical industry research firm Chemical Markets Resources (CMR) estimated it would take up to six months for the Japanese petrochemicals industry to restore its plants. It could take years for all of the nation’s infrastructures – logistics and power – to come back to normalcy, CMR said.
American Chemistry Council economist Kevin Swift said the impact of the Japan crises on US chemical producers should be relatively modest. “I would expect the first half (of 2011) to be soft, but the second half to pick up and be strong into 2012 as rebuilding takes place,” he added
Japan is seeking prompt supplies of fuel to run its power plants and plug a severe domestic shortfall, after about 22% of its refining capacity was shut down in the aftermath of the earthquake. Energy giant JX Group has terminated exports of oil products to cater to domestic demand, while operations at most oil terminals in northeastern Japan are shut down.
Japan’s Shin-Etsu shut its 550,000 tonne/year polyvinyl chloride (PVC) plant at Kashima after the earthquake, and this is expected to strain PVC supply from the country. Japan Polyethylene’s polyethylene (PE) plants at Kashima and Kawasaki are also down.
Asahi Glass Co (AGC) shut its caustic soda plants at Chiba and Kashima after they were damaged in the earthquake, while Japan Polypropylene’s production site at Kashima was badly affected by the tsunami that followed.
In addition, Kashima Chemical has shut its two epichlorohydrin (ECH) units at Kashima, Keiyo Monomer’s 200,000 tonne/year vinyl chloride monomer (VCM) facility at Chiba remains down, and two of six monethylene glycol (MEG) plants in Japan are not operating.
Additional reporting by Franco Capaldo, Feliana Widjaja, Chow Bee Lin, Nurluqman Suratman, Helen Yan, James Dennis, Felicia Loo, Becky Zhang, Lester Teo, Pearl Bantillo, Judith Wang, Junie Lin and Helen Lee
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