SEA cracker outages and lack of deep-sea cargoes underpin olefin prices in Asia
Northeast Asian propylene prices had been declining due to a growing oversupply as Chinese PDH plants have restarted from their extended turnarounds in October. Since late October, however, the cracker outage at Malaysia’s PrefChem, as well as Chandra Asri’s cracker shutdown this week, have bolstered spot propylene prices.
Traders believe that propylene prices will likely be supported at current levels, with these cracker issues holding up propylene prices in November. They were assessed stable on the week at $840/ton CFR China and at $850/ton CFR Southeast Asia as of November 10.
Spot ethylene prices have also been propped up by the closure of the US-to-Asia arbitrage flow, with no reports of deep-sea, ex-USG cargo arrivals into Northeast Asia and China for December. Traders said freight and handling costs have also risen, and these have made shipping ethylene cargoes to Asia even more expensive.
Spot ethylene prices stayed flat this week and were assessed at $880/ton CFR China and at $900/ton CFR Southeast Asia as of November 10.
RAPID shuts cracker following refinery fire; Chandra Asri also shuts Cilegon cracker
Growing oversupply in Northeast Asia drove propylene prices lower, but cracker outages at RAPID and Chandra Asri have aided to stem the potential deeper price slide, traders said.
The Pengerang cracker was taken down on October 27 due to a pipeline fire at the refinery, while Indonesia’s Chandra Asri has also shut its Cilegon cracker due to technical issues. Traders believe these outages will provide support for propylene prices in November and may still bolster December prices. Traders said the cracker outage will likely last through November at a minimum, although no specific duration has been provided by Malaysia’s PrefChem.
PrefChem, a joint venture between Malaysia’s Petronas and Saudi Aramco, operates the Pengerang Refinery and Petrochemical Integrated Development project (RAPID). It is part of Petronas’ $27 billion Pengerang Integrated Complex, consisting of a 300,000 bbls/day oil refinery and a petrochemical complex with a production capacity of 7.7 million tons per year.
The complex includes a 1.29 million tons/year ethylene cracker and 630,000 tons/year propylene, 165,000 tons/year benzene, 180,000 tons/year butadiene units. Derivatives include a 350,000 tons/year LLDPE unit, a 400,000 tons/year HDPE unit, a 900,000 tons/year PP unit and a glycols plant with the capacity to produce 800,000 tons/year of MEG. Its fluid catalytic cracker is also able to produce 730,000 tons/year of propylene.
Meanwhile, Indonesia’s PT Chandra Asri has been facing technical issues at its cracker, located in Cilegon, West Java. The cracker was shut for maintenance on November 8, with the shutdown expected to last through end November, and likely to be extended into December, according to industry sources. PT Chandra Asri Petrochemical Tbk (CAP) is Indonesia’s largest petrochemical producer and owns the country’s only naphtha cracker which has 900,000 tons/year of ethylene and 490,000 tons/year of propylene output in Cilegon.
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