Lotte Chemical will suspend operations at its production plant in the Yeosu National Industrial Complex in South Jeolla for two months. With the Middle East crisis disrupting naphtha supply, the company aims to manage risk by moving up its scheduled routine maintenance that requires shutting down equipment.
Lotte Chemical said on the 27th that it will halt operations across all production facilities at the Yeosu plant. Production is scheduled to resume on May 29.
The shutdown comes as the company moved up by about three weeks its turnaround (Turn Around·TA), which had originally been set for the 18th of next month. A turnaround is a process carried out every three to four years that involves stopping production facilities for cleaning, inspections and parts replacement.
Lotte Chemical said, "Sales are expected to decline during the routine maintenance period, but production will resume once the maintenance is completed."
On the 23rd, LG Chem also halted operations at the No. 2 plant of its naphtha cracking center (NCC) in the Yeosu complex. LG Chem plans to keep the No. 2 plant offline until naphtha supply stabilizes and operate only the No. 1 plant.
The petrochemical industry's successive shutdowns are seen as a preemptive response to potential feedstock supply disruptions amid worsening naphtha supply-demand imbalances and shrinking inventories.
Meanwhile, considering the gravity of the situation, the government announced and put into effect at 12 a.m. today the "regulations on restricting naphtha exports and stabilizing supply and demand."