SOUTH KOREA TO PAY MORE FOR JAPANESE ETHYLENE

  South Korea will pay about 20 pct more for
  ethylene imported from Japan in the second quarter of the year
  because increased plastic production in both countries has
  boosted demand and tightened supplies, chemical industry
  sources said.
      South Korea has agreed to pay Japanese trading houses just
  over 400 dlrs C and F per tonne, up from an average of 350 dlrs
  in the first quarter and throughout 1986, they said.
      South Korean demand for imported ethylene this month has
  risen to 17,000 tonnes from 10,000 last month, and the country
  may face difficulties covering the extra volume, they said.
      &lt;Korea Petrochemical Industries Corp>, a producer of high
  density polyethylene (HDPE) and polypropylene, will more than
  double its ethylene requirements to 9,000 tonnes a month from
  4,000 when it completes a plant expansion at the end of this
  month, the sources said.
      &lt;Honan Ethylene Corp's> import requirements have risen to
  8,000 tonnes a month from 6,000 tonnes last year to meet strong
  demand from &lt;Honan Petrochemical Co>, which makes HDPE and
  ethylene glycol, and &lt;Hangyang Chemical>, which produces
  low-density polyethylene and vinyl chloride monomer, they said.
      But Japan's ethylene plants are already operating at almost
  full capacity of 4.5 mln tonnes a year just to fulfill domestic
  demand, the sources said.
      "And even if Japan had the additional ethylene, there is a
  logistical problem of finding extra appropriate-sized vessels
  to ship it to Korea," said one trading house source.
      Japanese trading companies are looking to alternative
  sources to supply South Korea's needs, including Saudi Arabia,
  Qatar and Mexico, they said.
      But long-haul voyages are expensive as the product has to
  be shipped at a temperature of minus 103 degrees centigrade to
  keep it in a liquid form, they said.
      Japan has no plans to invest further in the ethylene
  industry in order to cope with the additional demand, despite
  rising prices, trading house sources said.
      South Korea has two projects in hand which will increase
  its ethylene production capacity by 500,000 tonnes a year by
  the end of 1989, so the strong demand surge for imports is only
  a medium-term trend, they said.
  

