Home Blogs Asian Chemical Connections MEG reacts to Taiwan developments

MEG reacts to Taiwan developments

Business, Fibre Intermediates, Markets, Taiwan
By John Richardson on 31-May-2011

By Malini Hariharan

Spot monoethylene glycol (MEG) markets have quickly reacted to news that Nan Ya Plastics, an affiliate of the Formosa Plastics Group, has been ordered by the Taiwanese government to shut down two plants.

Prices surged by $15-30/tonne to $1,140-1,160/tonne CFR China, reports the blog’s colleague Becky Zhang on ICIS news.

Nan Ya has been asked to shut its 360,000 tonne/year No 3 and 820,000 tonne/year No 4 MEG plants. The company’s two other MEG plants with a combined capacity of 720,000 tonnes/year have been shut since 12 May after a fire at the Mailiao complex damaged the pipelines that supply ethylene. The company had earlier announced that production would resume only in July after receiving approval from the local government.

The four plants account for about 10% of Asian MEG capacity.

As mentioned by the blog yesterday, the Formosa Plastics Group has attracted government scrutiny after a fire at its Mailiao site on 12 May. The Yunlin provincial government has ordered a shutdown of six plants until safety checks are carried out.

Besides the two MEG plants, Nan Ya has also been asked to shut a 130,000 tonnes/year bisphenol A line, a butanediol plant and an isononyl alcohol unit.

Formosa Plastics Corp (FPC) has been asked to shut a vinyl chloride monomer (VCM) plant and has also been fined New Taiwan dollar (NT$) 1m ($34,662) for above-normal pollution at the unit.

The plant was affected by the 12 May fire which brought down a system that diffuses pollution, a company source told ICIS news.

FPC hopes to negotiate with the Yunlin government to explain the reason for the pollution after the fire, the source said.