MOSCOW (MRC) -- Japan's JX Nippon Oil & Energy Corp shut a 140,000 tonnes per year (tpy) propylene-making unit at its Kawasaki plant for an indefinite period due to bad margins, said Reuters.
The propylene unit, which uses olefins conversion technology and feed on ethylene and butene, was shut on Monday, a company spokesman said.
Traders said a string of new propane dehydrogenation (PDH) plants springing up in China and South Korea have created an oversupply of propylene, a building block for plastics.
"Propylene is not doing well due to oversupply. In the last 12 months, we were seeing on-purpose propylene plants coming onstream," said a Singapore-based trader.
Naphtha cracking margins on the other hand are healthy, traders said, as crackers produce a diversified range of petrochemical products including propylene, butadiene, but with the bulk of it being ethylene, also a building block for plastics.
"Ethylene is holding up, thanks to demand," said another trader but based in North Asia.
As MRC informed before, on January 6, 2015, Japan's JX Nippon Oil and Energy shut its olefins conversion unit (OCU) in Kawasaki indefinitely. The shutdown has been attributed to compressed margins in the wake of low propylene prices as compared to prices of ethylene.
The Nippon Oil Corporation, or NOC or Shin-Nisseki is a Japanese petroleum company. Its businesses include the exploration, importation, and refining of crude oil; the manufacture and sale of petroleum products, including olefines (ethylene, propylene) and aromatics.