18 March 2011 13:30 [Source: ICIS news]
Regional supply of paraxylene (PX) was notably tighter, with three Japanese facilities owned by Tokyo-headquartered JX Nippon Oil & Energy shut since 11 March.
Spot PX prices pulled back slightly on Friday, following sharp gains through the middle of the week, as JX Nippon Oil declared a force majeure on supply.
Meanwhile, the main downstream market for Asian PX – purified terephthalic acid (PTA) – has started to suffer from tighter PX supply, with some Chinese producers bringing forward planned turnarounds at plants.
Supply of methyl ethyl ketone (MEK) in Asia is also being affected by the shutdown of Japan-based Maruzen Petrochemical’s 170,000 tonne/year facility in
The facility, damaged by fire after the 9.0-magnitude earthquake and ensuing tsunami, seems unlikely to restart soon. Maruzen Petrochemical has cancelled its MEK shipments, originally due to be loaded this month, its customers said.
A few shut-down plants are slowly coming back on stream in the northeast of Japan, including two of the six shut refineries: a 175,000 bbl/day refinery in Chiba owned by Kyokuto Petroleum Industries – a joint venture between US major ExxonMobil and Japan's Mitsui Oil – and TonenGeneral Sekiyu's 335,000 bbl/day unit in Kawasaki.
“While some oil refineries have been seriously damaged, we think a major impact on longer-term supply is unlikely, given the slow pace of demand growth in Japan and spare capacity in the industry,” Shunta Omura, an analyst for Tokyo-based investment bank Nomura Securities, said in a recent research note.
The prospects remain bleak for an imminent restart of other derivative facilities where the four shut-down naphtha crackers are located.
Meanwhile, petrochemical plants still on stream are unlikely to run at maximum capacity because of fuel and power shortages, as well as problems obtaining feedstocks due to port closures near the epicentre of the earthquake.
“The rolling power cuts in the greater Tokyo region are having a wide-ranging impact on production plants in the chemicals industry. While petrochemical companies can cope with these blackouts by using in-house power generation, they are having a major impact on operations at chemical manufacturers which do not have such facilities,” Omura said.
The Nikkei 225 closed 244.08 points higher at 9,206.75 on Friday, with a pledge from the Group of Seven (G7) industrial economies to intervene to stem the yen’s rise.
Additional reporting by Becky Zhang, Nurluqman Suratman, James Dennis
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