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China: Taiwan's Nan Ya unable to restart MEG unit on feedstock shortage

https://www.chemnet.com   Aug 09,2010
Taiwan's Nan Ya Plastics is not able to restart its 350,000 mt/year No. 3 monoethylene glycol unit at Mailiao this week due to a continued shortage of
ethylene feedstock, a company source said Friday.


Nan Ya Plastics gets the ethylene for its plant from affiliate Formosa Petrochemicals. But a fire at Formosa's No. 1 steam cracker, which can produce
700,000 mt/year of ethylene, has left the producer short of the feedstock.


As a result, the No. 3 unit, which was idled June 30 for a three-week maintenance, is forced to stay shut.


The source refuted a media report that the unit will be started August 7.


Late Tuesday, Formosa Petrochemicals bought one spot ethylene cargo at $900/mt CFR Taiwan for delivery in the second half of August. It is expected that some of the cargo will be allocated to Nan Ya.


Based on the cost of this cargo, the production cost for MEG can be calculated to be about $660/mt. With a typical $20-25/mt freight cost, Nan Ya can make a profit, as MEG on a spot basis was assessed by Platts at $755/mt CFR China on Thursday.


Nan Ya had earlier slashed supply of MEG to its contract customers by 30% due to a shortage of ethylene.


Meanwhile, Nan Ya Plastics' three other MEG units at Mailiao are running at "below 100%," but the source declined to comment on the exact operating rates.


The company's No. 1 and 2 units each with a capacity of 350,000 mt/year, while its No. 4 unit has a capacity of 700,000 mt/year.


The No. 2 unit, which is a joint venture with China Man-Made Fiber Corporation, is expected to be shut for a turnaround after the restart of the
No. 3 unit.
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