From: Reuters, BEIJING
Published August 15, 2011 06:58 AM

China's Dalian Fujia plant runs normally despite shutdown order

China's privately-run Dalian Fujia Petrochemical Co Ltd is operating its 700,000-tonne-per-year paraxylene plant normally despite a local government order on Sunday to close the plant due to a toxic spill scare, an industry source said on Monday.

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Authorities in Dalian in northeastern Liaoning province ordered the Fujia plant to be shut down immediately on Sunday after thousands of local residents demonstrated, demanding the relocation of the factory at the center of a toxic spill scare.

The plant, one of the country's leading importers of naphtha, is carrying on normal shipments of naphtha from regular suppliers such as Iran and Papua New Guinea, according to the source.

"The plant is running normally ... there is no notice for operation changes," said the source with direct knowledge of the plant's operations.

The Fujia plant, jointly owned by local government-backed Dalian Chemical Group and private real estate company Fujia Group, imports 100,000-120,000 tonnes of heavy naphtha a month, according to two trading sources.

The industry source said while the plant was running normal for now, it remained unclear what would happen later.

Calls to the Dalian government went unanswered.

According to shipping fixtures and a trading source, there is at least one medium-sized naphtha cargo booked for loading late August from Port Noresby and one or two cargoes from the National Iranian Oil Company.

"I think the Dalian government is under big public pressure to order the shutdown, but at the same time authorities have to consider that Fujia is a big tax payer for Dalian," said a Beijing-based oil trader.

"If it's a complete shutdown, it will have major impact on naphtha and petrochemicals market."

Naphtha, a refinery product, can be used as feedstock to produce PX, which is an intermediate to make polyester.

Photo credit: CFC Group.

Article continues: http://www.reuters.com/article/2011/08/15/us-dalianfujia-idUSTRE77E13N20110815

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