06 December 2012 02:17 [Source: ICIS news]
MELBOURNE (ICIS)--Japan’s Mitsui Chemicals plans to shut its No 1 phenol/acetone plant in Chiba for 25 days in January 2013 because of poor market conditions, a company official said on Thursday.
The producer plans to halt operations at the plant, which can produce 190,000 tonnes/year of phenol and 114,000 tonnes/year of acetone, between 10 January and 3 February 2013 because of persistently high feedstock benzene costs and comparatively weak phenol prices, the official said.
The loss of phenol output resulting from the shutdown has been estimated by Mitsui chemicals at around 17,000 tonnes.
The Chiba No 1 phenol/acetone plant is currently undergoing a turnaround and is scheduled to be restarted on 10 December.
The producer plans to run the plant at 60% capacity upon restart until 9 January 2013.
The gains in prices of benzene feedstock have outpaced those of phenol throughout October and November, resulting in severe margin erosion for phenol makers across Asia.
Taiwan’s Taiwan Prosperity Chemical Corp (TPCC), South Korea’s Kumho P&B Chemicals as well as China’s Bluestar Harbin Petrochemical have taken similar steps to stem their margin losses.
Benzene prices have surged by 15.3% since early October to close at an average of $1,433/tonne (€1,089/tonne) FOB (free on board) Korea for the week ended 30 November, according to data compiled by ICIS.
The prices of phenol, meanwhile, rose by 4.6% over the same two-month period to close at an average of $1,490/tonne CFR (cost & freight) China for the week ended 30 November, ICIS data showed.
“This is the toughest market we have faced,” the Mitsui Chemicals company official said.
“We have to be flexible in order to cope with the market situation,” he added.
Mitsui Chemicals operates a second phenol/acetone plant in Chiba that can produce 230,000 tonnes/year of phenol and 138,000 tonnes/year of acetone.
Phenol/acetone output at the Chiba No 2 plant, which is a joint venture between Mitsui Chemicals and Idemitsu Kosan, will be reduced to about 90% capacity for the month of December to enable minor maintenance to be carried out.
Operating rate at the Chiba No 2 plant will be ramped up to 100% capacity from January 2013, the Mitsui Chemicals company official added.
($1 = €0.76)
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