China Petrochemical: March planned crude oil processing cut of over 10% Asian petrochemical giants collectively reduce production

(Source: Xingyuan Chemical Park Research Institute)

According to Reuters, Sinopec plans to cut crude oil processing by more than 10% this month from the original plan, with an average processing volume in March potentially decreasing by 600,000 to 700,000 barrels. Sinopec refineries process about 5.2 million barrels of crude oil daily, accounting for roughly one-third of China’s total refining capacity.

Asia is highly dependent on Middle Eastern naphtha, with over 60% of maritime imports coming from the Middle East. Most companies have limited tank capacity, with raw material inventories only able to sustain 2–3 weeks. As tensions in the Middle East persist, concerns over shipping delays and order cancellations are increasing, turning supply risks from anticipated to real.

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South Korean Petrochemical Companies Announce Partial Force Majeure and Reduced Operations

As a major importer of naphtha, South Korea imports approximately 4 million tons per month, with over 55% coming from the Middle East, mainly the UAE, Qatar, and Kuwait. Due to supply disruptions, leading South Korean petrochemical companies are generally reducing their operating loads, with some declaring force majeure.

· Lotte Chemical: Lishui cracking unit maintenance moved up to early April; Daejeon cracking unit load reduced to about 70%.

· LG Chem: Lishui cracking units No.1 reduced to 64%, No.3 to 73%; Daejeon cracking unit decreased from 69% to 54%.

· Yancheng Naphtha Cracking Center (YNCC): Both Lishui units reduced to 68%.

· Korea Petrochemical Industry Corporation (KPIC): Ulsan Wonsan cracking unit reduced from 80% to 75%.

Japan’s Short-Term Impact Due to Routine Maintenance

Japan also relies heavily on naphtha imports, but currently, the peak maintenance season from March to April means most units are shut down as scheduled, so the supply crisis impact is temporarily limited.

· Keiyo Ethylene: Chiba 768,000-ton/year ethylene plant under maintenance from January 22 to March 20.

· Crasus Chemical: Oita 694,000-ton/year ethylene plant under maintenance from February 26 to April 20.

· Higashi-Ogawa: Yokkaichi 527,000-ton/year ethylene plant shut down in early March, expected to resume in the first half of April.

· InnoChem: Kawasaki 540,000-ton/year ethylene plant under maintenance from early March to mid-June.

Market warning: If naphtha shortages continue to worsen, the maintenance periods of these units may be extended.

Several Southeast Asian companies declare force majeure

The petrochemical industry in Southeast Asia is also highly dependent on Middle Eastern naphtha, with significant impacts from shipping disruptions. According to ICIS, since March 3, companies such as Indonesia’s Chandra Asri, Singapore’s PCS and Aster Chemical, and Vietnam’s Hyosung Vina Chemical have announced force majeure.

· Singapore PCS: Cracking units’ average load reduced to about 65%.

· Malaysia Pengerang Refining: Due to brief maintenance of the vacuum distillation unit, cracking load dropped to about 60%, with plans to resume in the week of March 15.

· Thailand PTTGC: Mainly uses domestic ethane as raw material, so impact is relatively limited; however, 35% of ethylene capacity is linked to refining, so if refining operations reduce load, supply risks remain.

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