Impact on Olefin supply from petrochemical crackers outages

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Petrochemical cracker outages can impact olefin supply and feedstock demand in the ports where they reside, but mixed results from a few recent events may be more of an indication of things to come. Naphtha offtake in East Asia so far in August is up nearly 4% from July. Similarly, ethylene offtake is strong with still more than half of the month remaining.

Several crackers are undergoing maintenance in the region, which may disrupt flows. Taiwan’s ethylene discharges nearly tripled in July from June and are strong so far in August. The country was likely pulling forward ethylene supplies in anticipation of turnaround maintenance at Formosa Mailiao’s number 3 cracker starting August 11. The maintenance was delayed from late July and should last through the end of September.

LG Chem’s naphtha cracker at the port of Daesan in South Korea was shut down for emergency maintenance on July 31.  Ethylene discharges at the Daesan port were strong in the three months ending May but have been nonexistent at both the port as well as the country since then.

The cracker outages in Taiwan and South Korea are countered by the restart of Sinopec SABIC’s Tianjin Petrochemical plant, which began in mid-July and has been ramping up volumes. The port of Tianjin does not usually load any ethylene for export, and instead, typically consumes it in factories nearby. The restart of the SABIC plant has pushed naphtha offtake up. Similarly, LPG offtake in Tianjin is also very strong so far this month.