Rising South Korean cracker rates to boost LPG demand
South Korean crackers are running harder as margins recover, writes Toong Shien Lee
South Korean cracker operators are aiming to raise run rates this month because of recent gains in ethylene and butadiene prices, raising demand for LPG feedstock with propane and butane still at a discount to naphtha.
Hanwha Total will lift utilisation at its 1.55mn t/yr Daesan cracker to 100pc from 92pc in March, while KPIC has already raised its 800,000 t/yr Onsan cracker rates to 90pc from 80pc. LG Chem is also planning to increase run rates at its 1.15mn t/yr Yeosu 1 cracker to 70pc from 64pc, at its 800,000 t/yr Yeosu 2 cracker to 80pc from 73pc, and at its 1.27mn t/yr Daesan unit to 67pc from 64pc.
GS Caltex is mulling raising utilisation at its 700,000 t/yr Yeosu cracker this month, as is Lotte Chemical at its 1.2mn t/yr Yeosu and 1mn t/yr Daesan units. Hyundai Chemical may ramp up rates at its 900,000 t/yr Daesan cracker to 60pc from 55pc in March, market participants say. The increase in olefin supplies from South Korea is expected to be partially offset by turnarounds at crackers in Japan.
The plan to increase rates comes as cracker margins recover in line with rising ethylene and butadiene prices, although margins remain in negative territory. Naphtha cracking margins rose to -$104/t by 28 February from -$304/t at the start of 2024 — the highest since May 2023, Argus data show. Propane cracking margins have recovered more rapidly as propane prices have fallen relative to naphtha, climbing to -$2/t by 28 February from -$240/t on 3 January. Flexible Asian crackers have shifted to propane from naphtha since January to maximise production margins.
Expectations of tighter ethylene and butadiene supplies in the region have pushed up prices to multi-month highs. The ethylene fob northeast Asia price rose to $935/t on 21 February from $820/t on 3 January, the highest since March 2023. Butadiene fob northeast Asia values increased to $1,270/t on 23 February from $898/t on 5 January, the highest since July 2022.
Related news posts
Polymers stocks safe in storm-hit Brazil: Braskem
Polymers stocks safe in storm-hit Brazil: Braskem
Orlando, 8 May (Argus) — Brazilian petrochemical giant Braskem said its polymer inventories are safe and protected from the damage caused by heavy rainfall at its operations in southern Brazil during the past two weeks. The inventories include polyethylene (PE), polypropylene (PP), ethylene and basic chemicals. Braskem had to shutdown all of its operations in Rio Grande do Sul state after the extreme weather event in recent days , the company told Argus on Wednesday, on the sidelines of the NPE Plastics fair in Orlando, Florida. The shutdown was completed safely, with no harm to the company's plants at the Triunfo petrochemical hub, which represents about 30pc of its ethylene production capacity in Brazil. Braskem is reevaluating its supply chain strategy to deal with the lack of production at the Trinfo hub. This includes serving its clients with PE produced at other company hubs in Brazil and Mexico, where it owns PE manufacturing joint venture Braskem Idesa. The same goes for PP and polyvinyl chloride (PVC), with other production hubs serving customers if the weather situation does not improve in the coming days. Operations at Braskem's 260,000 t/yr bio-based PE plant will restart as soon as conditions improve, the company said. No fatalities occurred at the company's operations, but part of its workforce has lost their homes and are being taken care of by Braskem, according to the company. State governor Eduardo Leite called the the flooding "the worst disaster in Rio Grande do Sul's history." There are 100 people dead and 128 missing, according to the state's civil defense. Braskem said it will resume its operations gradually, after weather conditions normalize and logistics in the state such as airports, railroads and flooded roads resume. Braskem is the largest producer of thermoplastic resins in the Americas and a leader in biopolymer production. By Frederico Fernandes Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Rains hamper LPG distribution in south Brazil
Rains hamper LPG distribution in south Brazil
Sao Paulo, 8 May (Argus) — Torrential rains that flooded southern Brazil's Rio Grande do Sul state decreased LPG distribution by 7-10pc in the region in the past week, market participants said. Distributor Copa Energia's operations at its Canoas city unit — which is responsible for 30pc of the LPG distributed in the state — are expected to resume in the coming days after being shut last week. The heavy rains since late April — that have left 100 people dead, 128 people missing and almost 164,000 displaced from their homes, according to the state's civil defense — have spurred companies to take measures to maintain gas supply in the region. Some firms have also advanced salary benefits to help workers deal with the crisis. State-controlled Petrobras' 201,000 b/d Alberto Pasqualini (Refap) refinery has cut LPG production, but has not disclosed by how much . The unit also produces diesel, gasoline and fuel oil, among other products. LPG distribution began normalizing earlier this week, after "the feeling of chaos and lack of information" over the weekend had passed, according to an industry executive. Many retailers are now able to retrieve products, but it is still unknown how many routes have been compromised. But LPG stocks have been able to meet demand so far, preventing any shortages. Hydrocarbons regulator ANP's measure to allow collaborative actions among sector companies without the usual bureaucratic procedures to keep the market supplied has had an immediate effect, according to LPG association Sindigas' chief executive Sergio Bandeira de Mello. Distribution has been carried out collaboratively in recent days, despite some retailers' facilities being underwater, vehicles being lost and roads destroyed. But the state will still face months of problems and precariousness, de Mello said. By Betina Moura Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Enchentes afetam operações de empresas no Sul do Brasil
Enchentes afetam operações de empresas no Sul do Brasil
Sao Paulo, 8 May (Argus) — Diversas empresas brasileiras suspenderam operações no Rio Grande do Sul em razão das chuvas intensas que causaram diversos alagamentos e danos à infraestrutura. As enchentes ocasionadas pelo recorde de chuvas geraram pelo menos 83 mortes e 111 pessoas desaparecidas, de acordo com o governo estadual. Mais de 23.000 pessoas foram obrigadas a deixarem suas casas em meio a danos generalizados, incluindo pontes e rodovias inundadas em diversas cidades. A barragem da usina hidrelétrica 14 de Julho, com capacidade de 100MW, no rio das Antas, rompeu na semana passada em meio às fortes chuvas. A Companhia Energética Rio das Antas (Ceran), que opera a usina, implementou um plano de evacuação de emergência em 1 de maio. A produtora de aço Gerdau informou em 6 de maio que suspendeu suas operações em duas unidades no estado até que seja assegurada a "segurança e proteção das pessoas". A empresa não divulgou o volume de produção de aço dessas unidades. A empresa de logística Rumo interrompeu parcialmente suas operações e informou que os "danos aos ativos ainda estão sendo devidamente mensurados". A gigante petroquímica Braskem desligou duas unidades no complexo petroquímico Triunfo, como uma medida de prevenção em decorrência dos "eventos climáticos extremos" no estado, afirmou em 3 de maio. A empresa adicionou que não há expectativa de data para retomar as atividades. A Braskem opera oito unidades industriais no Rio Grande do Sul, que produzem 5 milhões de toneladas (t)/ano de petroquímicos básicos, polietileno e polipropileno, de acordo com seu website. Por Carolina Pulice Envie comentários e solicite mais informações em feedback@argusmedia.com Copyright © 2024. Argus Media group . Todos os direitos reservados.
Japanese ethylene producers unite for decarbonization
Japanese ethylene producers unite for decarbonization
Tokyo, 8 May (Argus) — Japanese petrochemical producers Mitsui Chemicals, Mitsubishi Chemical and Asahi Kasei have agreed to co-operate on decarbonization of their ethylene crackers in west Japan, targeting to decide a pathway within the current April 2024-March 2025 fiscal year. They plan to accelerate carbon neutrality at Mitsubishi Chemical and Asahi Kasei's 496,000 t/yr Mizushima cracker in Okayama prefecture and Mitsui Chemicals' 455,000 t/yr Osaka cracker in Osaka prefecture. The partners aim to introduce biomass feedstocks such as biomass-based naphtha and bioethanol and low-carbon cracking fuels like ammonia, hydrogen and electricity. They said joining forces will enable them to accelerate reducing greenhouse gas emissions, although they have not yet decided any further details. Mitsui Chemicals has experience in using bio-naphtha and recycled pyrolysis oil at its Osaka cracker. Japanese petrochemical producers have increasingly united to achieve decarbonization of their production processes, which account for around 10pc of the Japanese industrial sector's carbon dioxide emissions, according to the trade and industry ministry. Mitsui Chemicals, Sumitomo Chemical and Maruzen Petrochemical agreed to study the feasibility of chemical recycling and using bio-feedstocks at the Keiyo industrial complex in Chiba. By Nanami Oki Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Business intelligence reports
Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.
Learn more