Three polypropylene (PP) producers in southeast Asia unexpectedly shut their plants in late March, further tightening supplies in the region. But the plant closures seem to have had little impact on the market as buyers continue to seek China-origin PP supplies to make up for the shortfall.
South Korean PP producer Hyosung shut its 300,000 t/yr PP plant at Ba Ria-Vung Tau province in Vietnam on 28 March because of technical issues. The plant resumed operations today.
Vietnamese operator Nghi Son Refinery and Petrochemical closed its 370,000 t/yr PP plant in Thanh Hoa province on 30 March because of technical issues. The plant is expected to remain off line for a week, according to industry sources.
Indonesian producer Polytama Propindo has suspended PP allocations to its domestic contract customers, likely in anticipation of a disruption to its feedstock propylene supplies from a fire that hit state-owned Pertamina's 125,000 b/d Balongan refinery on 29 March. The producer temporarily closed its 300,000 t/yr PP plant in Balongan, west Java, as part of safety measures on the same day that Pertamina shut its refinery to prevent the fire from spreading.
Polytama is coordinating with Pertamina on the supply of feedstock propylene so that it can resume operations but did not provide a restart date for its PP plant, according to a customer letter.
Pertamina is gradually restarting its Balongan refinery, expecting it to return to normal operations soon, according to market participants. Pertamina said last week that the refinery would likely be shut for around 4-5 days following the fire.
Regional PP supplies have already tightened since early March, with two producers operating their plants at reduced rates because of feedstock propylene shortages and another shutting its plant last month for planned maintenance.
Southeast Asian buyers are continuing to seek China-origin PP supplies, which are widely available at competitive prices, to make up for the shortfall, mainly of the raffia grade, from southeast Asian and Middle East producers.
Further price reductions for China-origin PP supplies last week have weakened market sentiment and pushed down converters' buying ideas in southeast Asia.
Regional PP raffia prices fell for a second consecutive session to $1,380-1,440/t cfr Vietnam and $1,400-1,450/t cfr Indonesia on 1 April, despite the unexpected plant shutdowns.
