Some Polypropylene Plants Face Shutdown in Southeast Asia, Prices Unaffected
Some Polypropylene Plants Face Shutdown in Southeast Asia, Prices Unaffected

Some Polypropylene Plants Face Shutdown in Southeast Asia, Prices Unaffected

  • 06-Apr-2021 1:00 PM
  • Journalist: Robert Hume

Three Polypropylene (PP) plants in Indonesia, South Korea and Vietnam went offline in the last week of March 2021, however, the closure had a limited impact on the prices of product as buyers sought Chinese PP to fill the gap.

The Indonesian petrochemical giant Polytama Propindo has suspended production of PP over apprehensions regarding availability of feedstock Propylene from the state-owned Pertamina’s Balongan refinery which was hit by fire last week.

Hence, as part of the safety measure, Polytama halted operations at its Balongan PP plant located in west Java. Polytama is yet to reveal the plant restart date.

The South Korean Polypropylene producer Hyosung has also shut its 300 KTPA PP plant at Ba Ria-Vung Tau province in Vietnam along with Vietnamese operator Nghi Son Refinery and Petrochemical which closed its 370 KTPA PP plant in Thanh Hoa province last week due to technical issues faced by both the producers. Although, Hyosung resumed production on 5th April 2021, the Vietnamese operator is expected to remain offline this whole week.

In the event of these unexpected plant shutdowns, Southeast Asian buyers are now turning towards the China-origin Polypropylene which is widely available at cheap and competitive rates. Greater number of Southeast Asian buyers were heard opting for Raffia grade PP from China to deal with the overall market instability and neutralizing the production shortfalls in the region, thereby stabilizing the overall prices.

Furthermore, lower prices of Chinese Polypropylene have pressured converters’ buying interests and are also weakening the market sentiments. Polypropylene prices for Raffia grade have fallen for two consecutive sessions. Price for PP raffia was last assessed around USD 1400 per MT cost & freight Indonesia in the first week of April, while it was USD 1360-1420 per MT in Vietnam, undermining these sudden plant closures.

As per ChemAnalyst,” Polypropylene prices are expected to slip in several parts of Asia in the coming weeks. Some supply related constraints are likely to rectify in April and fresh supplies are expected from producers located in South Korea and China. Demand is likely to remain healthy especially from woven bags and BOPP film manufacturers. However, wide gap between offers from China and Southeast Asian PP producers may pressure the overall profit margins.”

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