Sumitomo to build polypropylene compound plant in China

(Plastemart) -- Japan's Sumitomo Chemical will build a 10 KTa polypropylene compound plant in Dalian, in northeast China's Liaoning province, as per Platts. The PP compound plant, which will be operated by a 50:50 joint venture between Sumitomo Chemical and Zhuhai Sumika Polymer, is expected to begin operations over September-November 2012.

The JV to be called Sumika Polymer Compounds Dalian Company will be incorporated in August. Sumitomo decided to build the plant because it expects demand for PP compounds in automobile production to increase. Zhuhai Sumika Polymer is 55% owned by Sumitomo Chemical and 45% by Japan's Toyo Ink. It already has a 22 KTa PP compounds plant in Zhuhai, in southern China's Guangdong province.

MRC

(Plastemart) -- S-Oil Corp's expanded plant for paraxylene and benzene is now in full operation, at the No. 2 Aromatic Complex in Ulsan. The expansion has more than double S-Oil's annual petrochemical production capacity to 1.6 mln tons of paraxylene and 300 KT of benzene. The two-year expansion project, completed in March, cost the refiner USD 1.2 bln).

⌠The plant is our new growth engine and future driving force that will help us diversify our business areas and establish a solid presence in the areas, as per S-Oil chief executive Ahmed A. Subey. We'll be able to gain a firm foothold in the petrochemical market as well as in the oil refining and lubricant oil markets where we've already secured global competitiveness.

Exporting around 60 percent of total output, S-Oil has been boosting its petrochemical business as a new revenue source over the last few years. S-Oil expects the new facilities to jack up exports by about USD 3.2 bln and sales by about 3.5 trillion won each year, respectively.

MRC

(Plastemart) -- Purnendu Chatterjee, Haldia Petrochemicals Ltd (HPL) promoter, has proposed eight allied chemical projects worth Rs 4.000 crore. HPL mulls chemical downstream units like those for synthetic rubber, used in the tyre industry, or pharmaceuticals intermediates. Some projects will involve foreign investment partners. This may be difficult until the legal wrangle between TCG and the Government is sorted out. The Chatterjee Group (TCG) and the West Bengal Industrial Development Corporation (WBIDC) have been locked in a court case for six years over who holds the majority in the HPL. The proceedings are over in the Supreme Court and the verdict is awaited from the two-judge bench.

MRC

(Dow Jones)--Formosa Plastics Group said Monday they may face additional closures and output losses at the Mailiao petrochemical complex in southern Taiwan, after a county government ordered several facilities there to be shuttered from June 1 on safety and pollution counts following two fires earlier in May.

Formosa Plastics Corp., the flagship company of the group, said it plans to appeal the government's order, which didn't specify how long the suspension would last. Some of the facilities operated by the group's Nan Ya Plastics Corp. unit are still running, but Formosa Plastics' polyvinyl chloride plant and Formosa Petrochemical Corp.'s No. 1 naphtha cracker have been closed since the fire, the companies said.

While the extent of the closures and output losses remain unknown, Formosa Petrochemical has already deferred most of its naphtha cargoes for June to the following month, traders said earlier.

A person close to the company said Monday that the company may restart its naphtha cracker early July, but that it might not be able to do so if operations at too many downstream plants remain suspended.

MRC

(Reuters) - Asia's naphtha price was near a one-week low on Monday, while timespreads fell to their lowest in 7 and half months as a prolonged cracker shutdown in Taiwan hurt sellers. The lost demand also sent cracks to their lowest in about 2 and half months and reduced Asian prices to levels lower than in Northwest Europe.

This helps open the opportunity for traders to move Gulf and Mediterranean cargoes to the West, provided they can find buyers.

June/July swaps timespreads were at a discount of USD 2.00 a tonne, down from a premium of 25 cents, making this the first contango since Feb. 22.

MRC