South Korean polymers producer Hyosung plans to start operations at its second 300,000 t/yr polypropylene (PP) unit at Ba Ria-Vung Tau only after starting up its propane dehydrogenation (PDH) unit at the Vietnamese petrochemical complex. The PP unit is likely to begin operating in this year's late third or early fourth quarter.
Hyosung is expected to start its new PDH unit with a nameplate capacity of 600,000 t/yr of propylene around July-August, according to market participants.
Hyosung signed an agreement with the Vietnamese government to build a $1.2bn complex in Ba Ria-Vung Tau province in early 2017. It will comprise a 600,000 t/yr PDH unit, two 300,000 t/yr PP units and LPG storage facilities. Its first 300,000 t/yr PP unit started operations in March 2020 using imported propylene.
Vietnam relied on imports for around 90pc of its PP consumption in 2020. The country has always been a key target for China's PP exports to southeast Asia because of its high PP consumption and import dependency, as well as its location bordering China.
But a severe PP supply shortage globally during March-April this year led to a wide arbitrage for China's exports to other markets, allowing the country to increase exports to other south Asian countries and Turkey, outpacing the growth of its exports to Vietnam. Vietnam imported 75,000t of China-origin PP during March-April, up by 34,000t for the same period last year. China exported around 524,000t of PP for March-April, up by 404,000t from a year earlier.
The start-up of Hyosung's second PP unit is expected to add pressure to regional supplies and prices in this year's second half. Argus assessed PP raffia prices at $1,180-1,200/t cfr Vietnam on 3 June, down by $205/t from two months earlier, partly because of rising supplies driven by new production capacity in Asia-Pacific.
