Pipeline closures due to explosions in Kaohsiung does not imact raw material supplies

04-Aug-14

A series of explosions at four pipelines in Koahsiung used to deliver chemicals such as ethylene and propylene killed at least 28 and over 300 injured. An investigation is underway to find the cause of the incident, as per ChinaPost.com. Although this series of explosions left several petrochemical delivery pipelines closed, raw material supplies used in production by petrochemical manufacturers remain normal. This news came as a relief to the market, which had feared that the suspension of the four pipelines could lead to a shortage of raw materials and impact production at petrochemical companies in Kaohsiung, including USI Corp., China Petrochemical Development Corp., Oriental Union Chemical Corp. and LCY Chemical Corp. Most local chemicals companies reassured that delivery pipelines outside of downtown areas are still functioning and there has been no supply shortage so far. The four closed pipelines belong to CPC Corp. and USI's subsidiary, China General Terminal & Distribution Corp. (CGTD). USI said while some propylene deliveries have been affected by the shutdown, supply from other pipelines operated by CGTD in suburban areas remains normal and will have little impact on the company's operations. China Petrochemical said it has added a number of deliveries by truck to offset the impact and ensure the company has sufficient raw materials for production.