Vietnam's sole cracker operator Long Son Petrochemical (LSP) is considering restarting its mixed-feed cracker and downstream polyolefins plants in Ba Ria-Vung Tau in August, according to market sources.
But restart plans are not yet finalised, according to sources close to the company.
The producer shut its entire petrochemical complex in October 2024 because of concerns over production margins and downstream demand.
The reasons for the restart are unclear but could be partly associated with the improved spread between the polyolefins and feedstocks prices.
The spread between linear low-density polyethylene (LLDPE) cfr Vietnam prices against naphtha Japan c+f prices averaged at $396/t in April-May, up by $53/t compared with $343/t in January-March, according to Argus data.
But Vietnam continues to be threatened by competitive international polyolefins import offers and a weaker demand outlook for exported goods.
LSP's Ba Ria-Vung Tau cracker is one of a few mixed-feed crackers in southeast Asia that have used naphtha and propane as feedstocks in a 30:70 ratio in recent years. The cracker can produce up to 950,000 t/yr of ethylene and 400,000 t/yr of propylene.
LSP's downstream polyolefins assets include a 500,000 t/yr LLDPE plant, a 500,000 t/yr high-density PE plant and a 400,000 t/yr polypropylene (PP) plant. The producer also operates a 100,000 t/yr butadiene extraction unit.
LSP is also retrofitting its cracker to feed ethane because of more lucrative margins. The producer plans to enhance its cracker with the usage of ethane for up to two-thirds of its feedstock on top of naphtha and propane. The project is due to be completed by the end of 2027.
LSP is a fully owned subsidiary of Thai petrochemical producer Siam Cement (SCG).
Exports to the US uncertain
The Trump administration announced a 46pc "reciprocal tariff" on US imports of Vietnamese goods. This is the third highest tariff rate imposed among southeast Asian countries after Laos and Cambodia. The 46pc tariff was supposed to take effect from 9 April before a 90-day pause was announced.
The 90-day pause is set to expire on 8 July. The window for goods shipments from southeast Asian countries to the US is already closed for converters to meet the arrival deadline of 8 July, while the outlook for new export orders remains uncertain. This has been capping demand for PE and PP resins among the southeast Asian converters and weighing on polyolefins prices.
Vietnam's goods exports to the US accounted for around 30pc of its GDP in 2024, making it vulnerable to the punitive tariff. The nation ran a trade surplus of $123.5bn with the US in the year, the third highest after China and Mexico.
