Malaysia fresh lockdown hit on petrochemical ops likely limited

Author: Nurluqman Suratman

2021/05/31

SINGAPORE (ICIS)--Malaysia will go on a nationwide lockdown for two weeks from 1 June, but petrochemical production will continue and is likely be spared from any major disruption given its classification as an essential sector.

For some local downstream plastic manufacturers, however, the lockdown may cause a manpower crunch.

The lockdown was announced on 28 May, following a sharp rise in new coronavirus cases in the country, with only essential economic sectors and services allowed to operate.

“This decision was made after taking into account the current situation of the COVID-19 outbreak in Malaysia, with daily cases surpassing 8,000 and over 70,000 active cases,” Malaysian Prime Minister Muhyiddin Yassin said.

The country reported five straight days of record hikes in coronavirus cases, with overall infections at more than 565,500 with 2,729 deaths as of 30 May, according to health ministry data.

Prior to the total lockdown, the government had begun tightening restrictions under a nationwide movement control order (MCO) or MCO 3.0, which started on 12 May and will last until 7 June.

In January, the government had imposed a second MCO (MCO 2.0) in six states in Malaysia for two weeks following a rise in new coronavirus cases.

Manufacturing of medical devices, textiles for producing personal protection equipment as well as oil and gas, including petrochemicals is allowed to continue amid the new lockdown.

"The manufacturing and manufacturing-related services sectors that are allowed to operate is to ensure minimal disruption to the supply chain of critical parts, components and finished products," the Ministry of International Trade and Industry said in a statement.

State-owned PETRONAS' petrochemical production units are expected to remain operational during the lockdown.

The company's refinery complex in Malacca which produces base oils will continue to run, according to a source close to the company.

Customer plants will also remain operational, the source said.

INEOS Petronas Acetyls' 535,000 tonne/year acetic acid plant in Kerteh will also remain operational.

PETRONAS' production of ethanolamines continue to run at full capacity and butyl acetate and propylene output remains unaffected, according to sources.

For methyl tertiary butyl ether (MTBE), the company is maintaining its lifting schedule for June and July.

Idemitsu SM Malaysia's plan to shut its 240,000 tonne/year styrene monomer (SM) unit by the end of this week remains on track, but its restart could be delayed if there is a manpower shortage.

While polyethylene (PE) and polymer plants in Malaysia will continue to operate during the lockdown, sources said that two downstream plastic factories will have their manpower slashed to 60%, according to sources.

Focus article by Nurluqman Suratman

Additional reporting by Matthew Chong, Izham Ahmad, Keven Zhang, Jude Chan, Melanie Wee, Trixie Yap, Koh Yuanlin and Helen Lee

Photo: Motorists ride past wearing face masks in front of the Twin Towers in Kuala Lumpur, Malaysia - 7 May 2021. (By Vincent Thian/AP/Shutterstock)