Sumitomo Chemical Recovers from Earthquake Hits, Resumes Production at its PE Unit

After announcing temporary plant closure since the earthquake of magnitude 7.3 hit Japan’s Fukushima coast on 13^th February, the Japanese petrochemical producer Sumitomo Chemical is preparing to restart operations at its affected facilities.

Power disruptions caused by the earthquake forced Sumitomo Chemical to halt Polyethylene (PE) and Polypropylene (PP) production at some of the units at its Chiba plant. As per the market sources, the company has resumed production at its polyethylene (PE) production facility located in the eastern prefecture of Chiba nearly 4 days after the earthquake hit the coast.

However, the company officials revealed that they are yet to resume the output at their Polypropylene (PP) facility in Chiba. The polypropylene (PP) unit of the company was also affected by the earthquake but the officials seemed unsure about the exact resumption date. Although there was no impact on the product shipments from the Chiba plant, the firm is aiming to resume full operations only after the full-fledged damage assessment is done.

The earthquake was said to disrupt operations at thermal power plants and oil refineries in east and north-eastern Japan. About 15% of the country’s total crude oil refining capacity went offline because of the quake-related power cuts. Among those still offline are the Eneos' 145,000 bpd Sendai refinery and some units at its 270,000 bpd Negishi refinery.

Sumitomo Chemical is the producer of various basic products at the plant such as Styrene Monomers (SM), Butadiene and Benzene. It is also engaged in manufacturing PP and PE in Chiba. The company’s total polymer production capacity stands at around 1.7 MMTPA of PE, 1.7 MMTPA of polypropylene (PP) and 3.3 MMTPA of polyolefins apart from other petrochemical products.

As per ChemAnalyst, the plant resumption is an early indicator of the country’s sectoral recovery post the calamity. Japan is a significant contributor to the Asian chemical output with its total chemical exports jumping by 24% year on year in January 2021. Hence, fears that situation may contribute to the rising benchmark prices of certain petrochemicals across Asia are prevailing among several players.