Malaysia's Pengerang complex restarted its 350,000 t/yr linear low-density polyethylene (LLDPE) unit on 4 July but it might take a while for the unit to achieve stable operations and on-specification output. The unit's start-up was slightly delayed from its earlier plan of late May.
It is also expected to soon restart its 450,000 t/yr polypropylene (PP) unit, which uses Spheripol technology, followed by its 400,000 t/yr high-density polyethylene unit and another 450,000 t/yr PP unit that uses the Spherizone technology in phases from this month.
The complex's operator Pengerang Refining and Petrochemical (PRefChem) — a 50:50 joint venture between Malaysia's state-owned Petronas and Saudi Arabia's state-controlled Saudi Aramco — has issued tenders to sell butadiene, benzene and raffinate-1](https://direct.argusmedia.com/newsandanalysis/article/2347299) for July and August loading. It has also achieved on-specification production of ethylene and propylene at its naphtha-based cracker, which will be used to run its downstream polymer plants.
PRefChem began restarting its upstream 300,000 b/d refinery and 1.3mn t/yr naphtha-based cracker at the Pengerang complex in mid-May. The entire complex shut after a fire in March 2020. Petronas last offered LLDPE and PP supplies in unbranded bags to the Asian and Turkish markets in March-April 2020 at preferential duties.
The return of Pengerang is expected to increase the availability of polymer supplies in Asia and suppress any feedstock cost driven-price increases for PE and PP, at times when downstream demand for finished goods is weakening. The availability of duty-free PE and PP supplies to southeast Asian converters will also increase, which could exert pressure on duty-free polymer prices.
Argus assessed duty-free LLDPE film prices at $1,360-1,380/t cfr southeast Asia on 1 July, unchanged from the previous week. Duty-free PP raffia prices were at $1,270-1,300/t cfr southeast Asia on 1 July, down by $35/t from a week earlier.
