LG Chem, Lotte Chemical shut Daesan plants after power failure

Petrochemical plants in Daesan, South Korea owned by LG Chem Ltd. and Lotte Chemical Corp. were shut down on Feb. 25 following a power failure, as per Chemweek.

Sources said that entire plants have been shut down. The shutdown is currently estimated to last about three to four days. The impact on the olefins market is expected to be limited as the plants are due to be restarted relatively quickly.

Lotte Chemical had maintained a 90% operating rate at its benzene-toluene-xylenes (BTX) units in Daesan from January, sources said earlier to Commodity Insights.

“It will take about two or three days [downtime], or it could be extended to a week for now,” a company source said. “Ahead of our regular maintenance, it was running at 90% as January,” the source added. The producer has another BTX unit at Yeosu, with a capacity to produce 220,000 metric tons per year of benzene, 120,000 metric tons per year of toluene and 85,000 metric tons per year of mixed xylenes.

LG Chem at Daesan operates a naphtha cracker with a capacity of 1.3 million metric tons per year (MMt/y) of ethylene and 520,000 metric tons per year of propylene.

LG Chem also produces butadiene, 235,000 metric tons per year; LDPE/LLDPE, 260,000 metric tons per year, 456,000 metric tons per year; VCM, 230,000 metric tons per year; PVC, 240,000 metric tons per year; EG, 180,000 metric tons per year; PP, 380,000 metric tons per year; SBR/S-SBR, 80,000 metric tons per year; PBR, 220,000 metric tons per year; and NBR, 65,000 metric tons per year.

LG Chem at Daesan operates BTX unit with a capacity of 240,000 metric tons per year of benzene; and 100,000 metric tons per year of toluene. It also manufactures phenol/acetone, 360,000 metric tons per year, 225,000 metric tons per year; BPA, 165,000 metric tons per year; and MTBE, 220,000 metric tons per year.

Lotte Chemical at Daesan owns a naphtha cracker design to produce 1.1 MMt/y of ethylene and 550,000 metric tons per year of propylene. The company also makes butadiene, 190,000 metric tons per year; LDPE/LLDPE, 130,000 metric tons per year, 290,000 metric tons per year; EG, 730,000 metric tons per year; PP, 500,000 metric tons per year. Its BTX unit produces 240,000 metric tons year of benzene, 120,000 metric tons per year of toluene, 60,000 metric tons per year of xylenes.

Lotte Chemical at Dasean also makes styrene, 577,000 metric tons per year; and MMA 90,000 metric tons per year.

We remind, Lotte Chemical has sold its entire 75.01% stake in Lotte Chemical Pakistan (LCPL) to AsiaPak Investments (Pakistan) and Montage Oil (Dubai). The deal was valued at KRW 97.9 billion ($67.9 million). The sale is expected to close in the coming months.

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Asian Paints Ltd. (Mumbai) said its affiliate Asian Paints International Pvt. Ltd. (Singapore; APIPL) entered into a share purchase agreement to divest its entire stake in its Indonesian operations to Berger Paints Singapore Pte. Ltd. (Singapore), a subsidiary of Omega Property Investments Pty. Ltd., as per Chemweek.

The cost of the transaction is USD7.5 million. The divestment is expected to lead to a recognition of a loss of approximately 900 million Indian rupees (USD10.3 million) in the consolidated financials of Asian Paints.

“This announced divestment of our operations in Indonesia will enable us to focus on priority markets of Middle East and South Asia and strengthen our international portfolio,” said Amit Syngle, managing director and CEO of Asian Paints.

APIPL had set up wholly owned entities, PT Asian Paints Indonesia and PT Asian Paints Color Indonesia, about nine years ago to tap the architectural coatings opportunity in Indonesia. “Despite the varied strategic steps undertaken over the last nine years to expand its operations in Indonesia by creating a strong customer value proposition through its expansive product portfolio, the operations in Indonesia remained sub-scale and immaterial to the overall international operations of the company,” said Asian Paints.

The company reported lower sales of 6% year over year at 85.2 billion rupees for the fiscal third quarter ended Dec. 31, with net income also declining by 23.5% to 8.5 billion rupees due to distribution expense.

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Denka Co. Ltd. has appointed Ikuo Ishida as the company’s new president and CEO, effective April 1. Ishida replaces Toshio Imai, who has been appointed as the new chairman, as per Chemweek.

Ishida joined the company in April 1985.

It reported a 3% year-over-year rise in revenue, to YEn301.5 billion ($1.9 billion), in the fiscal first nine months ended Dec. 31. Its net profit declined by 28% year over year, to Yen2.5 billion. Operating income stood at YEN11.8 billion, down 5.9% year over year.

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Last week, propylene prices gained in the Southeast Asia region while remaining steady in other parts of the Asian region, as per Polymerupdate.

An industry source in Asia requesting to remain unidentified informed a Polymerupdate team member, Propylene prices in Asia remained mostly steady despite little trading activity. Prices in Southeast Asia increased, due to limited availability, which raised buyers' expectations.

The source added, The spot market experienced a surge in high-priced offers, owing to several propylene plants staying shut. On Friday, CFR Southeast Asia propylene prices on Friday were assessed at the 865-875/mt levels, an increase of USD (+10/mt) from the previous week.

Meanwhile, FOB Korea propylene prices were assessed at the USD 820-830/mt levels while CFR China propylene prices were assessed at the USD 845-855/mt levels, both week on week steady.

CFR Taiwan propylene prices were assessed flat at the USD 825-835/mt levels, while FOB Japan propylene prices were assessed stale at the USD 810-820/mt levels. Squeezed downstream margins and muted buying interest were seen against the backdrop of a decelerated trading momentum in the rest of Asia.

In plant news, SK Advanced is in plans to restart its Propane dehydrogenation (PDH) unit in early March 2025. The unit was shut for maintenance on December 17, 2024 with operations initially scheduled to restart in end February 2025. Located in Ulsan, South Korea, the PDH unit has a propylene production capacity of 600,000 mt/year.

In other plant news, National Oil Corporation (NOC) has issued a force majeure (FM) on supplies from its cracker last weekend. Further details on the duration of the FM could not be ascertained. Located in Ras Lanuf, Libya, the cracker has an ethylene production capacity of 360,000 mt/year and propylene production capacity of 185,000 mt/year.

Guangxi Huayi New Materials has shut down its propane dehydrogenation (PDH) plant on February 10, 2025. Further details on duration of the shutdown could not be ascertained. Located in Qinzhou, Guangxi in China, the plant has a propylene production capacity of 750,000 mt/year.

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MMC Norilsk Nickel's Kola MMC subsidiary will commission a new cobalt production facility this year to replace the one damaged by fire in 2022, the in-house publication KN51 reports, quoting Nornickel Senior Vice-President - Operational Director Alexander Popov, as per Interfax.

He said the new facility planned to produce 3,000 tonnes of cobalt annually. Construction started in 2024, and the facility will produce its first cobalt in the middle of 2025.

The Kola MMC nickel electrolysis shop cobalt department had the capacity to produce 2,500 tonnes of cobalt before the fire, which occurred in September 2022. After the fire, Nornickel started to extract cobalt from concentrate, enabling it to obtain up to 1,000 tonnes of cobalt metal per year and close all contracted volumes, Sergei Stepanov, Senior Vice-President - Operational Director, has said.

"Our current cobalt production capacity is 1,000 tonnes, and we will produce 3,000 tonnes at the new facility. That is, this is directly related to additional revenue and business efficiency for Kola MMC and the whole of Nornickel," Popov said.

"You'll recall there was a fire in the cobalt department in 2022, and we quickly restored and launched a mini-cobalt production facility with capacity of 1,000 tonnes. Many thanks to our colleagues for this, because we are one of Russia's key cobalt producers. The country's industry would have a shortage without our cobalt," Popov said during a visit to the Kola MMC industrial site in Monchegorsk.

The company's platinum group metals production chain started to operate as usual the day after the fire was extinguished.

A section to produce chemically pure precious metals will also be launched at Kola MMC in September, Popov said, describing this project not only as industrial but also scientific.

"Kola MMC is one of Nornickel's key divisions, because essentially, the whole range of products shipped directly to our customers is manufactured here. So it is important that colleagues work steadily, so deliveries to our consumers are not disrupted, and products are of the right quality," Popov said.

Kola MMC earlier began producing premium nickel, generating additional profit, Popov said. The project to renovate the cobalt extraction department was designed by the Gipronickel Institute.

Nornickel is Russia's only cobalt producer. Russia is the world's second largest cobalt producer with a share of about 5%, way behind the leader, which is DR Congo. Russia produced 7,600 tonnes of cobalt 2021 but Congo produced 120,000 tonnes. The plan was to produce about 8,760 tonnes of cobalt in 2022, rising from an average of 5,000-5,500 tonnes in 2014-2017, ACRA experts calculated. Cobalt production increased 5.1% in 2024, Rosstat has said, without disclosing absolute figures.

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