China BD producers may export to Taiwan, South Korea in October

Author: Helen Yan

2020/09/11

SINGAPORE (ICIS)--China’s butadiene (BD) producers are seeking export opportunities in South Korea and Taiwan in October, as domestic supply is expected to lengthen while availability elsewhere in Asia remains tight.

A downstream South Korean synthetic rubber (SR) producer said that China-origin BD is expected to be available for October loading.

Hengli Petrochemical’s new plant in China’s Liaoning province which started up in February 2020 may have material available to ship abroad next month, market sources said.

Fresh supply will become available in China toward the fourth quarter as three new domestic BD units with a combined capacity of 290,000 tonnes/year are due to come on stream.

China new BD capacity in 2020 (in '000 tonnes/year)

Region Producer Capacity Construction completed Remarks
Zhejiang, east China Zhejiang Petrochemical (phase one) 200 Q1 Started sales in February; running at 100% from early April
Liaoning, northeast China Hengli Petrochemical 140 Q1 Commissioned in early February, then started sales
Liaoning, northeast China Liaoning Bora LyondellBasell 120 Q3 Commissioned in early August, then started sales
Fujian, south China Sinochem Quanzhou Petrochemical 120 Q3 Supply due out in end September-early October
Guangdong, south China Sinopec Zhongke Refining & Petrochemical 120 Q3 Supply due out in October
Shandong, north China Wanhua Chemical 50 Q3 Trial runs set in October
Hubei, central China Sinopec-SK Petrochemical 60 Q4 Capacity expansion

Source: ICIS

“BD supply is tight Taiwan, Korea and southeast Asia, so China’s Hengli PC [Petrochemical] may be looking to export BD from October to Korea or Taiwan,” another downstream SR producer said.

Planned and unplanned outages in Malaysia, Taiwan and South Korea had limited spot supply in Asia, fueling recent spikes in BD prices.

Spot BD prices have surged by about 73% over a two-month period to $650/tonne CFR (cost and freight) NE (northeast) Asia on 4 September, ICIS data showed.

“Demand is healthy, but supply is limited outside of China,” a trader said.

In Taiwan, Formosa Petrochemical Corp’s (FPCC) 176,000 tonne/year BD unit at its No 3 cracker is currently shut for maintenance. The turnaround will last around 70 days until late October.

In South Korea, Lotte Chemical is likely to delay the restart of its 150,000 tonne/year BD unit in Daesan to November or early next year. The unit was shut in early March following a fire at the cracker.

In Malaysia, Pengerang Refining and Petrochemical (PRefChem) is also expected to only resume production at its 185,000 tonne/year BD unit in early 2021. The unit was shut following a fire at the company’s complex in Johor in mid-March this year.

Focus article by Helen Yan

Visit the ICIS Coronavirus topic page for analysis of the impact on chemical markets and links to latest news.