Mitsui Chemical delays elastomer plant start-up amid weak demand

Tokyo – Mitsui Chemical Inc. (MCI) is delaying the start-up of a new elastomer production plant in Singapore as the supply/demand environment remains weak.

The project, with the capacity to produce 120ktpa of Tafmer polyolefin elastomers, was launched last August on Jurong Island and was initially set for start-up in fiscal 2024 (ending March 2025). (ERJ report)

In its latest quarterly financial report, however, MCI said it had delayed the commissioning to fiscal 2025, without giving an exact timetable.

During a 6 Aug earnings call, CFO Nakajima Hajime said the group “will take into account the supply-demand environment and work out the timing.”

For the first quarter of fiscal 2024, ended 30 June, MCI said the sales volumes of elastomers were up, mainly in automotive applications.

However, the Japanese group said trade environment deteriorated due to the easing of supply-demand, as a result of “increased competition.”

Furthermore, the group said its anticipated inventory adjustments of solar panels in China materialised earlier than expected.

Therefore, while volumes are “growing steadily year-on-year, [but] they are not growing as fast as originally planned.”

Nevertheless, Hajime said MCI expects both the easing of supply/demand and the inventory adjustment of solar panels to be resolved towards fiscal 2025.

Overall, MCI said its Tafmer plant capacity utilisation rate in the first quarter was lower than the year before, due to scheduled maintenance work carried out from May to June.

In the second quarter, the plant is producing “at a slightly lower capacity utilisation,” Hajime said without offering an explanation.