Petrochemical cos cut production on weak demand from China

26 Sep '08

2 min read

Weak market demand of Chinese consumers is forcing petrochemical manufacturers in Taiwan to scale-down production and diversify their supplies to emerging markets in Europe, Brazil, Republic of South Africa, India and Vietnam.

Manufacturers in Taiwan have expressed concern not over the prices but rather on the slumping demand, admitting that the financial crisis in US has dwindled orders from China.

In a bid to cope with this deteriorating situation of slower demand from China, Taiwan producers of PE (polyethylene), PP (polypropylene), EG (ethylene glycol) and PTA (purified terephthalic acid) are slashing production to sustain prices.

Moreover, many others have adopted strategies like shutting down for maintenance. For instance, Formosa Petrochemical Corporation (FPC) recently underwent a maintenance of its third ethylene plant, which had an annual output of 1.2 million metric tons. Formosa Plastics Corporation, Nan Ya Plastics Corporation and Formosa Chemical & Fibre Corporation have adopted similar policies for plants that mainly turn out intermediate petrochemicals.

USI Far East Corporation, Asia Polymer Corporation and Taiwan Styrene Monomer Corporation said they have reduced buying of ethylene from CPC Corporation Taiwan to cut losses, as the quotation from CPC is $300 per metric ton higher than the spot price.

Producers of ethylene derivatives like Taiwan styrene Monomer Corporation, Grand Pacific Petrochemical Corporation, Union Petrochemical Corporation, China Man-made Fiber Corporation, and Oriental Union Chemical Corporation are also cutting back on production.

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