01 March 2013 07:26 [Source: ICIS news]
SINGAPORE (ICIS)--China’s SP Chemicals is operating its Jiangsu-based vinyls units at around 40% capacity until late March, following a restart early last week after safety checks for the units were completed, a Singapore-based company source said on Friday.
Operating rates at the producer’s caustic soda, vinyl chloride monomer (VCM) and ethylene dichloride (EDC) facilities are still affected by complications from the leak at a soy oil storage tank at a nearby berth, the source added.
The facilities are expected to run at full capacity in the second half of March, the source said.
The caustic soda and VCM units have combined nameplate capacities of 750,000 dry metric tonne (dmt)/year and 500,000 tonnes/year respectively. The nameplate capacity of the EDC unit was not immediately available.
The caustic soda unit is made of up two lines – an older one with a nameplate capacity of 450,000 dmt/year and a new 300,000 dmt/year line. The older line remains off line at the moment, according to market participants.
As a result of the low operating rates, SP Chemicals has no spot cargoes available for export in March, as all its VCM and EDC output will be used to fulfil contractual volumes, the source said.
While enquiries for all three products are coming in steadily, the source said the lack of spot cargoes meant that the company is unable to fulfil these enquiries.
China-based market participants said that SP Chemicals is having difficulty fulfilling some contract volumes for March and this may stretch to April if its low operating rates persist. However, this could not be confirmed by the company source.
According to another market participant, there were a few days when the producer’s plants were completely shut because of technical difficulties, but further details were not immediately available.
The lack of cargoes from SP Chemicals is expected to increase the existing supply tightness of EDC and VCM within the Asian markets, according to market players.The limited availability has already contributed to the rising prices of spot caustic cargoes in China, market participants added.
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