Lotte Chemical Brings Forward Yeosu Cracker Maintenance — OPIS

About this update from Lotte Chemical Corporation

South Korea's Lotte Chemical shut its Yeosu cracker for maintenance in the last week of March, ahead of its original schedule in April. The turnaround is expected to last slightly more than two months, with a restart slated for early June.The maintenance was brought forward due to difficulties in securing feedstock amid the ongoing Middle East conflict, according to some sources, although this could not be confirmed.OPIS earlier reported that the turnaround was initially planned from April to June, marking the company's first cracker maintenance for the year.The Yeosu cracker has an annual capacity of 1.2 million metric tons per year of ethylene and 620,000 mt/year of propylene, according to OPIS data.Domestic supply of downstream petrochemicals is expected to tighten. OPIS previously reported that LG Chemical shut its No. 2 cracker in Yeosu on March 23 due to a shortage of naphtha feedstock.The shutdown comes against the backdrop of a slew of tender cancellations across Asia. OPIS data shows that three tenders issued after the U.S.-Iran cease-fire on April 9 have been cancelled."The cease-fire didn't bring much reassurance to the market, especially as there were still ongoing attacks that threatened the stability of the ceasefire. Even though prices dropped following the announcement, prices are still relatively elevated, and sellers are still factoring in a war risk premium in offer levels for tenders," a trader said."Prices remain high as LPG supply is not easy to secure despite the cease-fire. Many shipowners are still not willing to transit the Strait of Hormuz due to lingering risks. There have been minimal vessel movements even after the ceasefire," another trader said.Some sources heard that offer levels received were at premiums in the $200s/mt to Far East quotes, a level that many market participants consider high.South Korea's LPG imports for April are estimated at 587,900 mt, and are projected to rise to 729,000 mt in May, with most of these originating from the U.S., according to Vortexa data.This content was created by Oil Price Information Service, which is operated by Dow Jones & Co. OPIS is run independently from Dow Jones Newswires and The Wall Street Journal.Reporting By Cheryl Lee, [email protected] ; Editing by Mei-Hwen Wong, [email protected]

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