21 January 2013 08:43 [Source: ICIS news]
SINGAPORE (ICIS)--South Korea’s ISU Chemical is currently operating its isopropanol (IPA) plant in Ulsan at less than half of its 60,000 tonnes/year nameplate capacity because of negative margins, a source close to the company said on Monday.
The company shut a 30,000 tonne/year line at the IPA plant the previous week, while the second 30,000 tonne/year line is operating at 70-80% capacity, the source said.
The average operating rates at both IPA lines were previously at 50-60% capacity, down from 70-80% in early December.
ISU Chemical made fresh cuts to its IPA production as weak demand in regional markets such as China and southeast Asia has hindered its efforts to raise prices to offset the high feedstock acetone costs, market sources said.
The South Korean producer also faced competition from rivals that use the lower-cost feedstock propylene for their IPA production, sources added.
“The market situation is likely to be grim even after the Lunar New Year holiday because of new start-ups,’’ a buyer said.
Last November, South Korea’s LG Chem started up a 50,000 tonne/year acetone-based line in Yeosu, while Chinese producer Jiande Xinhua Chemical brought onstream a similar-sized propylene-based plant at Yancheng in Jiangsu province.
The new plant capacities have yet to make a major impact on the market, because of their low operating rates, market sources said.
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