Feedstock, Olefins and Aromatics

S Korea’s KKPC cuts BR unit run rate on poor market conditions

ICIS News : 19-Apr-12 04:11

SINGAPORE (ICIS)--South Korea’s Kumho Petrochemical (KKPC) will run its 210,000 tonne/year butadiene rubber (BR) plant at Yeosu at 70% of capacity because of poor market conditions, a company source said.

“We cut the operating rate to 70% earlier this week and will run at this reduced rate until early May because of negative margins and weak market conditions,” the source added.

KKPC has a total BR capacity of 350,000 tonnes/year and its other 140,000 tonne/year BR line is shut from 10 April to 5 May, the source said.

Asian BR makers have been affected by waning demand and high feedstock butadiene (BD) costs which have wiped out their margins.

Although the spot price of feedstock BD fell by $100/tonne (€76/tonne) to $3,400-3,450/tonne CFR (cost & freight) northeast (NE) Asia in the week ended 13 April, according to ICIS, the margins are still in negative territory because of falling BR prices.

BR prices shed $50/tonne to $3,700-3,750/tonne CFR NE Asia in the week ended 12 April, ICIS data showed.

A spread of about $600-700/tonne is required for BR makers to generate any margins.

BR is used in the manufacture of tyres for the automotive industry, and KKPC is a major Asian BR producer.

($1 = €0.76)

By Helen Yan
+65 6780 4359
icisnews.asia@icis.com