PO demand slows, will prices slide?

By Malini Hariharan

After a fairly steady climb Asian polyolefin markets have hit the pause button.

Demand for polyethylene (PE) and polypropylene (PP) in China and Southeast Asia has weakened but this development has so far been balanced out by continuous reports of operating issues across Asia and the Middle East.


The latest is Yansab’s announcement that it was forced to shut its 1.3m tonnes/year cracker last Friday due to technical problems. Operating rates of derivative units have been cut and the company expected normal operations to resume within two weeks.

Al-Waha also shut its 450,000 tonnes/year polypropylene (PP) plant last week and is expected to be up over the next few days.

In China, the Sinopec and Sabic joint-venture 1m tonnes/year cracker is down due to mechanical problems which are expected to take a week to fix. All the downstream polymer plants have also been shut.

Qilu Petrochemical is expected to run its 800,000 tonnes/year cracker at 80% till end-September as repairs to the furnace that caught fire last month have still to be completed

In India, a fire at Gail’s high-density polyethylene (hdPE) plant killed one person and injured three others last Saturday. The company has shut down one line and has started an enquiry into the accident.

Reliance’s 400,000 tonnes/year gas cracker at Nagothane is running at reduced rates (around 70%) because of an accident at feedstock supplier ONGC’s cooling tower has hit supplies of ethane/propane. The situation is expected to continue for a few more weeks and until then one line of the 240,000 tonnes/year hdPE/linear-low density PE (lldPE) plant is likely to remain shut.

Indian Oil Corp (IOC) has yet to stabilise operations at its new Panipat cracker complex and polymer plants. The swing hdPE/lldPE plant was taken offline a few weeks back because of technical problems. And while the standalone hdPE and PP plants are running production of onspec grades is an issue.

Operating issues have struck Asian polymer markets at regular intervals over the last year helping producers stabilise prices.

Will this be the case once again?

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