Yeochun to Restart No. 3 Ethylene Plant After Inventory Drops

By Shinhye Kang

Dec. 9 (Bloomberg) -- Yeochun NCC Co., South Korea's largest ethylene producer, will restart its smallest plant today after a 20-day shutdown reduced inventories of the raw material used to make plastics and chemical products, a company official said.

The plant, known as the No. 3 cracker, will resume operations at 10 a.m. local time after it was shut on Nov. 19, said the official, who asked not to be identified because of company rules. The plant is capable of making 400,000 metric tons of ethylene from naphtha each year.

Yeochun had closed the plant after the global economic downturn cut ethylene demand. Prices of ethylene for loading in South Korea rose to $410 a metric ton in the week ended Nov. 28 from this year's low of $330 a ton reached two weeks earlier, according to data from industry publication Polymerupdate.

The ethylene maker plans to gradually increase the plant's operation rate to 85 percent, the official said. Yeochun's two bigger plants, capable of producing 857,000 tons and 555,000 tons of ethylene annually, are operating at full capacity, he said.

Yeochun plans keep the No. 3 cracker running because a drop in prices of naphtha, a refined oil product used to make ethylene, has helped improve margins, the official said.

Naphtha prices for cargoes loading in Singapore, Asia's biggest oil-trading center, have slumped 80 percent from a record $135.45 a barrel on July 4.

To contact the reporter on this story: Shinhye Kang in Seoul at skang24@bloomberg.net.