South Korean petrochem makers struggle to cut losses with shutdowns amid global supply glut |
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MOSCOW (MRC) --
Domestic South Korean petrochemical companies are struggling to cut their losses
by shutting down manufacturing facilities amid the global supply glut, reported
Plastemart with reference to businesskorea.co.kr.
Hyundai Cosmo, a
subsidiary of Hyundai Oil Bank, is mulling over stopping the production of
800,000 tons of paraxylene (PX) from next month.
"The operation of the
second plant, which produces 800,000 tons of PX, is scheduled to be stopped for
regular repair and maintenance and energy efficiency enhancement," said the
parent company.
However, industry insiders say that the shutdown is due
to the recent drop in PX price. Under the circumstances, S-Oil, GS Caltex,
and Lotte Chemical have reduced their capacity ratios.
The problem is
several new PX production plant start ups - SK Incheon Petrochem and SK
Chemicals, both of which are subsidiaries of SK Innovation, will run new
facilities from late June with annual capacities of 1.3 million tons and one
million tons, respectively.
As MRC wrote before, Samsung Total will add one
million tons to its annual production volume from the second half of this year,
too. The combined quantity is equivalent to more than half of the domestic PX
production volume as of March.
A series of bisphenol A (BPA) production
plants are being closed due to a supply glut as well. BPA is a type of
engineering plastic for use in automobiles, mobile phones, and electronics
appliances.
LG Chem, which had stopped its BPA production lines in
Daesan, in February this year, was planning to reopen the plant this month, but
has postponed the plan due to adverse market conditions.
"Korean
petrochemical corporations expanded their facilities to provide against rising
demand in emerging markets such as China, but it has turned out that the demand
increase falls short of their previous expectations," an industry watcher
explained, continuing, "The slimming down is likely to continue for a while
unless demand recovers." |
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mrcplast.com | |
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