Click the icon to add a specified price to your Dashboard list. This makes it easy to keep track on the prices that matter most to you.
Major petrochemical producers including LG Chem and Lotte Chemical have halted their operations at Daesan, Korea, due to electrical supply disruptions early Tuesday morning. These companies shut production activities at their naphtha crackers and associated downstream units following power outage from the government supply grids.
The incident occurred at around 9.30 a.m. (12.25 a.m.) local time at two plants located in the Daesan Petrochemical Complex, about 100 kilometers south to Seoul, capital of South Korea. Reports said that both companies burnt raw materials used in the production process amid the suspension of plant operations, giving rise to black smoke pouring out of the factory chimneys. “The recommencement of factory operations with a normal capacity will take long time even if power supply gets restored,” said a senior industry official on condition of anonymity.
Both companies are expected to incur losses worth billions of won due to the incident. KEPCO, the state power utility, said in a statement that there is no problem with its power lines in the region, raising speculations that there may a problem with the factory premises.
Operational capacity
According to reports, Lotte Chemical’s cracker in Daesan has a nameplate production capacity of 1.05 million tonnes per annum of ethylene and 500,000 tonnes per annum of propylene. Reports further stated that Lotte Chemical’s downstream capacity of ethylene oxide (EO) and ethylene glycol (EG) unit to the tune of 860,000 and 700,000 tonnes per annum have been closed due to power failure.
Another 626,000 tonnes per annum of ethylbenzene unit, a 500,000 tonnes per annum of polypropylene (PP) unit, and 460,000 tonnes per annum of polyethylene (PE) plants are reported to have stalled their operations owing to electricity outage.
Similarly, LG Chem has also shut its Daesan cracker with its nameplate production capacity of 1.27 million tonnes per annum ethylene and 650,000 tonnes per annum of propylene installed capacity. Furthermore, integrated downstream units include 530,000 per annum of PE units, 600,000 tonnes per annum of ethylbenzene unit, 114,000 tonnes of EO, 125,000 tonnes per annum of EG, and 380,000 tonnes per annum of PP facilities are also shut.
The plant closure has triggered LG Chem to withdraw its tender to buy naphtha for April delivery. The company issued the tender on February 25 morning, but withdraw it immediately after electricity failure was reported.
DILIP KUMAR JHA
Editor
dilip.jha@polymerupdate.com
