Operating problems strike Asian polyolefins

By Malini Hariharan

Just when polyolefin markets have started recovering operating issues are cropping up at plants in Asia.

ExxonMobil was forced to shut its 600,000 tonnes/year polyethylene (PE) plant in Singapore on Tuesday for two weeks due to undisclosed problems. The PE plant had faced problems in early July when it was shut down for about a week.

Shell Chemical’s 800,000 tonnes/year cracker in Singapore was shut down on Tuesday evening and it is likely to take 1-2 days for operations to resume, market sources told ICIS news.

“The flare system at Shell’s Pulau Bukom manufacturing site was activated in the afternoon of 3 August 2010 due to an unplanned disruption to a process unit,” a Shell spokesperson said.

“The rest of the operations [were] not affected,” said the spokesperson, without elaborating on the current status of the cracker.

There are now polyolefin plants downstream of the cracker but Shell has a surplus of ethylene and propylene at the site.

In Taiwan, Formosa Petrochemical plans to make a 30% operating rate cut at its PE plants in August and September due to shortage of ethylene. Supply of the monomer has been affected as the company’s No1 cracker has been shut down after a fire in early July.

The company has a 350,000 tonne/year high density PE (HDPE) plant, a 264,000 tonne/year linear low density PE (LLDPE) unit and a 240,000 tonne/year low density PE/ethylene vinyl acetate (LDPE/EVA) swing plant

A planned shutdown at its No2 cracker has now been deferred from late August to end-September or early October. But the company also indicated that the operating rate cut could extend to October.

And Formosa Chemicals & Fibre Corp (FCFC) is likely to cut production at its 450,000 tonnes/year polypropylene (PP) plant as Formosa Petrochemical will not be able to supply full volumes of propylene.

Formosa Petrochemical has yet to restart an olefins conversion unit (OCU) and two residual fluid catalytic crackers (RFCC) after a fire at its refinery last month.

“We’ll have to cut PP production in August but we don’t know yet how much to cut back,” an FCFC source told ICIS news.

Another group company, Formosa Plastics Corp (FPC), faces a similar situation.
We don’t plan to cut [PP] production yet because we still have propylene in storage. But we may experience feedstock shortage in September and October when Formsoa Petrochemical shuts its No 2 cracker for maintenance,” an FPC source said. FPC runs a 350,000 tonnes/year PP plant.

The blog has been highlighting some of the factors behind the recent recovery in prices. The trend continues – PE prices have already inched up by $50-100/tonne this week while PP prices have risen by $40/tonne. Ethylene prices have risen by $20/tonne over the last four weeks led by strong crude and naphtha values.

But the new round of operating problems is likely to create room for producers to push through more price hikes.

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