China’s NZLC runs PO plant at 90% on strong pre-holiday demand

25 January 2013 06:26  [Source: ICIS news]

SINGAPORE (ICIS)--China’s Ningbo ZRCC Lyondell Chemical (NZLC) is running its propylene oxide (PO) plant at rates of above 90% capacity amid strong pre-holiday demand, sources familiar with the company said on Friday.

The company is the largest PO producer in eastern China, with a nameplate capacity of 285,000 tonnes/year PO unit in eastern China. This translates into an average monthly output of above 20,000 tonnes, or more than 650 tonnes daily.

Demand among domestic customers has been strong because of restocking activity in downstream polyether polyols factories before they close progressively ahead of the Lunar New Year holiday starting from late January. In addition, the spot supply condition in China has been affected by a shortage of imports following production issues at key overseas facilities in the Middle East and Thailand in the previous few weeks.

Consequently, local Chinese PO prices have increased by yuan (CNY) 200-300/tonne to CNY12,000-12,500/tonne ($1,929-2,010/tonne) on a DEL basis during the week, market sources said. They anticipate further prices gains in view of continued buying activity over the next one to two weeks.

NZLC also produces 620,000 tonnes/year of styrene monomer (SM) as a co-product as it employs the PO/SM process. Other PO production methods include the traditional chlorohydrin process and the (HPPO) process, whereby PO is made from propylene and hydrogen peroxide.

NZLC is a joint venture between LyondellBasell and Zhenhai Refining & Chemical Co (ZRCC), a subsidiary of China’s petrochemical giant Sinopec.

Additional reporting by Vikki Shen in Shanghai

($1 = CNY6.22)

By: Jingyi Chan
65 6780 4259

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