Pilipinas Kao's fatty alcohol plant undergoes expansion

07 June 2013 10:19  [Source: ICIS news]

SINGAPORE (ICIS)--Pilipinas Kao is expected to boost its fatty alcohol capacity by 40,000 tonnes/year to 150,000 tonnes/year by early August, a source close to the company said on Friday.

The plant at Jasaan in the Philippines was shut on 1 June to undergo the capacity expansion, which will take about two months to complete, the source said.

The facility is one of four southeast Asian facilities scheduled to shut between May and early August.

This heavy shutdown schedule has worsened the supply shortages in the key Chinese market, market sources said.

Chinese buyers are trying to secure prompt regional supplies in order to plug the domestic production shortfalls, which started at the end of April when key supplier Liaoning Huaxing Group Chemical Corp suspended operations because of “environmental” issues.

It is as yet unclear when Liaoning Huaxing will be able to resume operations.  The company has in total five lines with a combined annual capacity of 220,000 tonnes/year, but sources said the company was operating at less than half its capacity prior to the shutdown.

The supply situation is further compounded by ongoing and upcoming planned shutdowns at two other Chinese facilities, Chinese sources said.

“Most end-users have been keeping low stocks since the start of the year because of the weak downstream demand. Now, they have to purchase at high prices in order to keep their production going,” a Chinese distributor said.

Domestic prices rose to yuan (CNY) 13,000-13,500/tonne ($2,117-2,199/tonne) DEL for imported materials in the week ended 7 June, up from CNY12,500-13,000/tonne DEL at the end of May.

($1 = CNY6.14)

By: Yeow Pei Lin

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