Japan Disaster: Plants and markets update

By Malini Hariharan

Japan’s benzene supply is expected to drop by 10% following plant shutdowns and diversion of product for gasoline blending, reports my colleague Mahua Chakravarty.

This works out to about 40,000 tonnes/month, which is lower than the initial estimate of 100,000 tonnes/month made immediately after the earthquake.

Traders have started booking cargoes from South Korea to meet the shortfall. But this has not had an impact on benzene prices which have eased slightly this week on poor styrene markets.

Five benzene plants with a total capacity of 1.13m tonnes/year remain shut while some plants are running at reduced rates.

In polyolefins, Japan is likely to import product as plants continue to remain shut.

A Taiwanese producer sold around 2,000 tonnes of linear low density polyethylene (LLDPE) at $1,530-1,535/tonne CFR Japan this week for April shipment, reports my colleague Bee Lin Chow.

Chinese re-export offers to Japan have also surfaced although a gap in price ideas appears to be hindering business.

But it is unlikely that Japanese buying will prop up the current weak Asian market.

Meanwhile, Mitsubishi Chemical has confirmed that it will take a few more weeks to restart its plants at Kashima. Plants at the site include two crackers with a total capacity of 828,000 tonnes/year.

“We are doing all in our power to rebuild, but we calculate it will take at least two months for the plants to go back on line,” said the company.

Mitsubishi has started inspecting the plants and also commenced some rebuilding activities. But infrastructure at the site has been badly damaged and that is likely to constrain resumption of operations.

This shutdown is likely to affect operations of other companies at Kashima that rely on feedstocks from Mitsubishi.

Shin-Etsu Chemical said that all operations at Kashima, where it make polyvinyl chloride (PVC), have been halted and inspection has yet to be completed.

Besides damage to facilities that power and water supply at the site has been hit.

“At present, it is still unclear how long it takes to re-start the operations at the Kashima plant,” said Shin-Etsu

Kashima Vinyl Chloride Monomer’s 600,000 tonnes/year vinyl chloride monomer (VCM) remains shut.

“The plant is likely to remain shut for two to three months as it was quite badly damaged by the earthquake,” said a source from the company, which is a subsidiary of Shin-Etsu.

, , , , , ,

Leave a Reply