phosphate note, page-20

Report on state of manufacture of P chemicals post earthquake - go MAK


Alex Scott and Ian Young
The devastating earthquake that struck Sichuan Province, southwestern China, on May 12 destroyed several chemical plants and disrupted chemical production and transportation throughout the region. The first earthquake, measuring 7.9 on the Richter scale, was followed by a number of heavy aftershocks. The official death toll had risen to almost 20,000 by CW press time. The overall cost of damage caused by the earthquake is estimated at about $20 billion.

Two fertilizer plants at Shifang, one of which is believed to be Shifang Zhenjiang Chemical, were destroyed, reports say. The collapse of the plants trapped more than 100 workers under rubble and caused an 80-m.t. leak of liquid ammonia, reports add.

Shifang, near to the earthquake’s epicenter, is rich in phosphate rock and the location of a number of firms producing phosphoric acid, phosphate fertilizers, and phosphorus derivatives. Chengdu, the provincial capital of Sichuan and 90 km southeast of the epicenter, and Chongqing, the province’s biggest city and 350 km from the epicenter, are also chemical-producing areas.

The State Administration of Work Safety (Beijing) ordered a halt to production at chemical and energy plants, and coal mines near the epicenter to avoid further casualties. Sichuan Lomon Corp., China’s biggest producer of titanium dioxide and Asia’s biggest supplier of feed phosphates, reportedly closed its plants although they are undamaged. Urea producer Sichuan Meifeng Chemical, melamine and fertilizer manufacturer Sichuan Chemical Works, pesticides and vinyls maker Sichuan Jinlu Group, and specialties and polycarbonate producer Chongqing Changfeng Chemical are among the companies that stopped production. “Although no mega chemical plants are located in the region, damage and operational shutdowns could tighten the supply-demand balance of the affected chemicals,” says Frank Mitsch, analyst at BB&T Capital Markets (New York).

BASF operates a concrete admixtures and admixture intermediates plant at Pengshan, near Chengdu. “There was some minor structural damage to buildings,” BASF tells CW. Production was halted temporarily as a precautionary measure, BASF adds. AkzoNobel also reportedly halted operations temporarily at a powder coatings unit at Chengdu, as did Kemira at a water treatment chemicals unit at Chongqing.

Transportation of chemicals by rail and road in parts of Sichuan was brought to a virtual standstill, local reports say. Chongqing Xinhua Chemical, another titanium dioxide maker, shuttered its plant because of a lack of sulfuric acid supplies, sources say.

Production was not affected at Sinopec’s Yaraco acetyls joint venture with BP at Chongqing. “Although not damaged, limitations in shipping and natural gas supply caused by the earthquake could curtail the production and availability of acetic acid,” Mitsch says. Sinopec could struggle to complete a natural gas pipeline project from Sichuan to Shanghai, delaying BP’s plans for an acetic plant at Nanjing, Mitsch says.
The earthquake also may force PetroChina to abandon plans for a refinery and ethylene plant at Pengzhou, near Chengdu, sources say. The $5.5-billion project was recently the target of environmental protests by local residents. “We believe this project could be significantly delayed or cancelled,” Mitsch says.