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Heavy turnaround schedule planned at steam crackers in Asia for 2010

 
Ethylene prices could rise in H1-2010 in Asia on tighter ethylene supplies anticipated in 2010 due to a heavy turnaround schedule at steam crackers. However, a possible increase in exports from the Middle East could help ease the strain on prices, as per ICIS. About 22 crackers would be shut for maintenance in 2010 compared with 15 taken off line this year. If the crackers in the Middle East have trouble next year, then there is some support for ethylene prices. The start-up of three new crackers in SE Asia by 2010 could lessen the impact from the heavy turnaround schedule as they will push down polymer and olefins prices and ease the tight balance in H2-2010. The key factor will be Chinaís insatiable appetite for petrochemicals and consumer goods that is anticipated to prevail into 2010 amid volatile swings in crude values and increased PE capacities within the country and from the Middle East.
Ethylene spot prices are near highest levels this year at US$1030-1070/ton CFR NE Asia in the week ending 20 November, mainly due to limited spot supplies and firm feedstock naphtha values at above $700/ton CFR Japan. Additionally, poor production rates in Iran (largest Middle East supplier of ethylene to Asia), have tightened availability of ethylene in 2009. Iranís crackers were running at an average of 50-60% this year primarily due to cracker outages and lack of gas feedstock. Its ethylene exports were estimated to fall to 400,000-450,000 tons this year from 680,000-700,000 tons in 2008. Out of the 5.8 mln nameplate PE capacities from the Middle East projected from end-2008 through to 2009, less than 50% actually came into the market this year.
PE producers in Asia, particularly in Malaysia and Thailand, are not very optimistic about polymer values as the removal of import tariffs within the region from January 2010 could cause price pressures due to more competition. Demand is beginning to wane as some buyers are waiting until January to make their PE purchases.

Cracker Turnaround Schedule 2010

Company Location Capacity (tpa) Shutdown dates
PTT Mab Ta Phut, Thailand 460,000 Jan-Feb
Sanyo Mizushima, Japan 470,000 mid-Feb to mid-Apr
* LG Yeocheon, Korea 900,000 3 Mar-8 Apr
Showa Denko Oita, Japan 675,000 13 Mar-26 Apr
Tosoh Yokkaichi, Japan 527,000 14 Mar-16 Apr
Maoming Maoming, China 380,000 Mar-Apr (TBC)
Keiyo Ethylene Chiba, Japan 740,000 May-Jun
Mitsui Osaka, Japan 450,000 Jun-Jul
Mitsubishi Kashima, Japan 375,000 Jun-Jul
** BASF-YPC Nanjing, China 600,000 H1 2010
*** CNOOC- Shell Huizhou, China 800,000 H1 2010
YNCC Yeocheon, Korea 400,000 17 May-20 Jun
Tonen Kawasaki, Japan 515,000 Aug-Sep (TBC)
Formosa Mailiao, Taiwan 1,030,000 Sep-Oct
Mitsubishi Kashima, Japan 453,000 Jul-Aug
YNCC Yeocheon, Korea 850,000 4 Oct-2 Nov
SK Energy Ulsan, Korea 690,000 4 Oct-4 Nov
CPC Linyuan, Taiwan 385,000 Nov-Dec
Rayong Olefins Mab Ta Phut, Thailand 800,000 Q4
Titan   Pasir Gudang, Malaysia 300,000 H1 2010 (TBC)
Titan Pasir Gudang, Malaysia 440,000 H2 2010 (TBC)
Yangzi Nanjing, China 650,000 H2 2010 (TBC)
Source ICIS
* LG Chem will debottleneck the cracker to 1 mln tpa.
** BASF-YPCís cracker capacity is expected to be increased to 740,000 tpa.
*** CNOOC-Shell plans to expand the cracker capacity to 1 mln tpa.
 
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