More Than A Dozen Plastic Chemical Companies Have Pressed The Production Pause Button! Involving SABIC, LG, Dow, etc.

Since January, due to the increase in crude oil price fluctuations, the profits of petrochemical plants have plummeted, coupled with frequent fires and natural disasters at the end of the year, SABIC, Korea LG, Korea SK, Hanwha Total Petrochemical, KPIC, Korea UPP, Thailand PTT, OQ, Oman, Many petrochemical manufacturers including Taiwan CPC, Guoheng Chemical, Nanya Plastics, Dow, Borealis, INEOS, Kem One, etc. have reduced or stopped production.

▶ Korea

SK, South Korea: In the early morning of January 12, a fire broke out at an oil refinery of SK in Ulsan and was extinguished a few hours later. According to relevant statistics, the plant has two sets of steam cracking units, the operating status of which is not yet known. The No. 1 steam cracking unit produces 200,000 tons of ethylene per year, and the No. 2 cracker produces 660,000 tons of ethylene per year. In addition, its 390,000 tons/year PP unit was also affected.

Ulsan Polypropylene (UPP): announced that it has postponed the maintenance shutdown plan of the 400,000-ton/year PP unit from the initial plan on January 3 to January 14, and is expected to restart on February 1. The company launched a PP production line in 2021 and sold PP to China and some Southeast Asian countries in early May 2021.

LG Chem: Reduced the operating rate of all three naphtha crackers in Daesan and Yeosu, South Korea, to 80%. The cracker, with a combined capacity of 3.25 million tonnes/year for ethylene and 1.48 million tonnes/year for propylene across all three units, will operate at a lower rate throughout January.

Korea Petrochemical Industries Corporation (KPIC): Due to negative profit margins, Korea Petrochemical Industries Corporation (KPIC) also plans to reduce the operating rate of its naphtha cracker in Onsan, South Korea, by at least 15% in February 2022. The cracker has an annual output of 800,000 tons of ethylene and 410,000 tons of propylene.

Hanwha Total Petrochemical (HTC): Hanwha Total Petrochemical (HTC) has reduced operating rates at its styrene monomer (SM) and polyethylene (PE) plants in Daesan, South Korea due to negative profit margins. The producer has two styrene lines with a capacity of 400,000 and 650,000 t/y, and a 1.1 million t/y PE unit, both at 70% capacity from January 2022 run. The producer has yet to announce a date for returning to normal operating rates for SM and PE units.

▶ Middle East:

OQ (Musqat, Oman; www.oq.com): OQ, Oman announced on January 14 a force majeure at its PP plant at Liwa Plastics Industries Complex (LPIC) in Oman due to technical issues following seawater backflow, according to market sources. The PP unit, consisting of three production lines with a total capacity of 300,000 tonnes/year, is expected to be shut down for two weeks. Fortunately, the company's 880,000 tons/year PE plant was not affected by this incident.

Kuwait National Petroleum Corporation (KNPC): On January 14, local time, a fire broke out at a major oil refinery of the Kuwait National Petroleum Corporation (KNPC) during maintenance, killing two workers on the spot and seriously injuring five others.

▶ Southeast Asia:

Thai National Petroleum Company Limited (PTT): The Thai National Petroleum Company Limited (PTT) closed its operations at the Map Ta Phut Industrial Port this week after encountering unexpected technical problems, according to market sources. 400,000 tons/year LLDPE (Linear Low Density Polyethylene) plant. So far, the company has not announced a plan for resumption of production. Some market participants also said that the company also shut down mPE (metallocene polyethylene) units in the region due to a shortage of some additives.

▶ For Europe:

Kem One (formerly Arkema): Had to shut down production of emulsion polyvinyl chloride (E-PVC) at its plant in Hernani, Spain. At the same time, it is reported that the production activities that have been suspended due to "technical failure" may be resolved in the short term.

Ineos: In mid-December, Ineos' subsidiary International Specialty Products (ISP) plant in Marl, Germany recently announced that its upstream monomer 1,4-butanediol (BDO) and intermediate tetrahydrofuran (THF) statement of force majeure. Market sources said that the INEOS device was restarted in early December after a month of maintenance, but there were apparently technical problems during the restart. According to the latest situation, the company's BDO plant is still operating at a low operating rate and has not fully resumed production.

Dow: Two of three crackers in Terneuzen, the Netherlands, failed. Dow had previously declared force majeure on all grades of polyethylene produced in Europe. The status of the device has not been announced so far.

Nordic Chemical: Plans to shut down its 300,000-ton/year cracker in Antwerp, Belgium for maintenance by late January. The installation is expected to remain closed until February.

▶ For Taiwan:

Taiwan's China Petroleum Corporation (CPC): It has delayed the restart plan for its No. 4 steam cracker in Linyuan, Taiwan by 15 days after a small fire broke out at the company's plant during maintenance on January 6. It is reported that the cracker has an annual output of 380,000 tons of ethylene and 193,000 tons of propylene per year. Originally, the plant was shut down on November 8, 2021 for regular maintenance and planned to restart on January 6. The second restart also failed, and the device is still in parking.

Taiwan Guoheng Chemical (GPPC): Plans to close its 250,000-ton/year styrene unit in Kaohsiung, Taiwan for maintenance by early February 2022. Further details on the duration of the shutdown could not be determined at this time.

▶ Domestic aspects:

According to online news, in the plastics chemical industry, many chemical companies have recently expressed that they have received "control notices".

A chemical company in Shandong responded that it received an oral notice from a superior to stop production from January 30 to February 20 and from March 4 to March 13 this year. In addition, many chemical companies in Hebei, Henan and other regions The company said that it has been notified that it is about to stop production.

The reasons for the shutdown of production are basically the same for all companies. Winter is the heating season, and it is prone to frequent heavy pollution. Therefore, the situation of staggered peak shutdown and production restrictions persists. In addition, some companies said that companies with boilers must stop production, which is equivalent to "seal" for chemical companies.

Since the beginning of this year, due to the epidemic, typhoons, skyrocketing freight rates and prices, the start of construction has not been ideal. Now that the end of the year has entered, under the restriction of many factors such as overhaul of large factories at home and abroad + force majeure, the operating rate of each factory has been greatly reduced, and the situation of enterprises has become more and more difficult.