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    Home > Chemial News > Paint & Coating News > Nearly one million tons of propylene production capacity is damaged in Southeast Asia! Orders flock to China!

    Nearly one million tons of propylene production capacity is damaged in Southeast Asia! Orders flock to China!

    Echemi 2021-04-06

    Beginning in late March, three polypropylene (PP) producers in Southeast Asia all experienced unexpected situations, and successively closed their factories, further tightening the supply in the region. However, as buyers in the local market turned to China to purchase PP resources to supplement the supply gap, the overall price in the Southeast Asian market did not fluctuate significantly.

     

    Due to technical problems, South Korean PP producer Hyosung closed its 300,000-ton/year PP plant in Ba Ria-Vung Tau Province, Vietnam on March 28.

     

    Due to technical problems, the Vietnamese operator Nghi Son Refining and Petrochemical closed its 370,000-ton/year PP plant in Thanh Hoa Province on March 30. Industry sources said the plant is expected to remain offline for a week.

     

    Indonesian producer Polytama Propindo has suspended PP distribution to its domestic contract customers, which may be due to a fire at the state-owned Pertamina's 125,000 barrels/day Balongan refinery on March 29, which interrupted its raw material propylene supply. As part of the safety measures, on the same day Pertamina closed its refinery to prevent the spread of the fire, the producer temporarily closed its 300,000-ton/year PP plant in Balongan, western Java.

     

    According to a customer letter, Polytama is coordinating with Pertamina to supply propylene raw materials so that it can resume operations, but did not provide a restart date for its PP plant.

     

    Market participants said that Pertamina is gradually restarting its Balongan refinery and it is expected that it will resume normal operations soon. Pertamina said last week that after the fire, the refinery may be closed for about 4-5 days.

     

    Since the beginning of March, the supply of PP in the region has been tight. Due to the shortage of propylene raw materials, two producers have operated their factories at lower interest rates, and another producer closed the factory last month for planned maintenance.

     

    Southeast Asian buyers have been looking for PP supply products from China, which are widely supplied at competitive prices to make up for the shortage of Southeast Asian and Middle Eastern producers, especially the shortage of drawing grades.

     

    Due to the unexpected closure of the factory, the price of PP drawing in the Southeast Asian market did not rise but fell, falling to $1,380-1,440/t CFR Vietnam and $1,400-1,450/t CFR Indonesia on April 1.

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