Kumho considers shutting Ulsan ABS plant on negative margins

30-Jun-11

Next week, South Korea's Kumho Petrochemical is considering shutting its 250,000 tpa acrylonitrile-butadiene-styrene (ABS) plant at Ulsan for one or two weeks. This decision has been triggered by poor demand and negative production margins, as per Platts. The plant is now running at around 70-80% of its capacity after a week-long maintenance shutdown that started June 9. The company's official offer on a CFR China basis is US$2150/mt, but retail prices in the trading hub of Hong Kong are said to be almost US$100/mt lower. Selling ABS at US$2100/mt CFR China, for example, means the company would lose around $300/mt. ABS reached its highest price so far this year at US$2330/mt CFR China, but has since fallen 10.3% to US$2090/mt Wednesday last week. In the same period, feedstock butadiene has surged US$1020/mt, or 32%, to US$4200/mt CFR China.