07 Jan 2022 | 04:51 UTC

Taiwan's CPC to delay Linyuan No. 4 cracker restart after Jan 6 fire: source

Taiwan's CPC will delay the restart of its No. 4 naphtha-fed steam cracker in Linyuan due to a fire on Jan. 6, a company source said Jan. 7.

The steam cracker, which has the capacity to produce 380,000 mt/year of ethylene and 200,000 mt/year of propylene, was shut on Nov. 8, 2021 for a planned turnaround and scheduled to restart on Jan. 9.

"There will be a delay in the restarting of this cracker, which is currently shut for planned turnaround. We are still working with the city government on the possible restart date," the company source said.

Industry sources expect the restart of the cracker to be delayed by 10-15 days.

CPC had increased its propylene term supply to customers in southern Taiwan to 92% for January, up from 67% in December.

"The term supply to our customers will be affected, but the reduction will depend on the reopening of this cracker," the company source said.

A term customer of CPC said the delay in the restart of the Linyuan cracker will impact its feedstock inventories.

"A trading house has moved up their price offer this morning," the customer said.

A series of planned and unexpected plant shutdowns in Northeast Asia is lending support to the spot market.

"Propylene is on an upward trend in January, a series of troubles lent support to higher price," a major propylene producer in South Korea said.

In the ethylene market, sentiment was bearish as derivative demand was weak and thinning margins was of highest concern.

"To be honest, downstream prices are really weak and if we have lesser ethylene due to the CPC outage, we would opt to reduce operating rates further to manage our losses instead of buying more spot ethylene," a buyer based in Taiwan said.

Ethylene demand has been weak, with some buyers in Northeast Asia saying they had been making losses on downstream production as early as June 2021.

"We have not been able to consume our ethylene fully as we have cut operating rates for HDPE, for example," a buyer in Taiwan