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Olefin products create turmoil in world market

16 Feb '08
2 min read

Olefin production is facing a recession worldwide and there are numerous factors behind this major operational turmoil. One of the reasons being perennial exports to non-petroleum countries in spite of a decline in the overall domestic output of these products.

Ethylene production in Japan fell by about 8.2 percent in January 2008 and this was accompanied by a hike in its prices in Asia which stood at US $1450 metric tons.

Increasing demand in the region and an equally intense supply shortage has aggravated the situation. To add to the misery, there has been a shutdown in Mitsubishi Chemicals' Kashima cracker which was capable of producing some 5,16,000 tons of ethylene annually.

Besides, an unprecedented power failure causing outage at Indonesia's Chandra Asri led to hindrances in the operation of the unit which produced about 5,90,000 tons of ethylene per annum.

PTT Chemical in Ta Phut, Thailand is also facing mechanical errors in its production process. All of these just goes to show that there is bound to be a supply crunch of ethylene in the region.

Propylene supplies are also showing a similar trend and if this situation continues for long, it will not take much time to have an international crisis of petrochemical products.

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