In the early morning of the 4th local time, an explosion occurred at Lotte Chemical’s Daesan factory, causing huge damage to nearby shops and residences. Due to the strong earthquake, parts of buildings collapsed or windows were shattered, and most facilities were damaged. The shock wave was so large that it even woke up nearby residents such as Karatsu, which are dozens of kilometers away.
According to reports, the accident has injured at least 31 people. It is understood that the accident was caused by a compressor failure. The temperature of this production line during the production process can reach more than 1,200 degrees Celsius. Although some downstream chemical products are still in operation, most of them have load reduction or shutdown plans, including PP, SM, EVA, etc. According to MEG’s latest information from CCF, individual units in Lotte Dashan have been shut down, and some units are in operation with load reduction. The specific impact and supply situation in March-April are still being evaluated.
Olefins and aromatics understand that Lotte Chemical’s ethylene cracking project in Dashan involves production capacity: ethylene production capacity of 1.1 million tons and propylene production capacity of 55 10,000 tons, 190,000 tons of butadiene, 577,000 tons of styrene, and 730,000 tons of MEG. According to data, Lotte Chemical ranked among the top 20 global chemical companies in 2019 with annual chemical sales of US$15.1 billion in 2018.
Data source: China Chemical Industry News
2:59 a.m. that day Around the same time, a huge explosion occurred at the ethylene cracking unit (NCC Naphtha Cracking Center) at the Daesan Plant of Lotte Chemical in Nishisan. After the explosion, fire authorities mobilized all available manpower and equipment from nearby fire stations to respond to the fire. After the accident, the local government of West City immediately sent out safety text messages to remind residents to pay attention. Jin Xianjing, deputy mayor of Xishan City, explained: “Because it was not a leak or occurrence of harmful chemical substances, no evacuation order was issued.”
After the accident, Leshan was closed It located 7 of its 10 facilities in Daesan-eup and announced that it would hold a press conference about the accident at 8:30 a.m. that day.
The total production capacity of South Korea’s domestic MEG devices is around 1.5 million tons, and the annual export volume to China in recent years has been between 450,000 and 550,000 tons, among which Lotte’s production capacity in Dashan is 300,000 tons and 400,000 tons/year respectively. In addition, the production capacity of a small line in Dashan is 125,000 tons. Under normal circumstances, the output of the accident device to China in a single month is expected to be around 20,000 tons. . Currently, due to the impact of the new coronavirus, global demand is under certain pressure, and the impact of supply-side surprises on market sentiment is weaker than usual. In addition, domestic MEG is still facing large oversupply pressure in the current period. Against this background, non-major supplier equipment The substantive impact of the failure on fundamentals is relatively limited, and the core logic of market development still lies in the development of the global epidemic and the recovery of domestic demand. </p
