[SINGAPORE] Singapore-based Aster Chemicals and Energy is prioritising a safe restart of its Bukom Island naphtha cracker while engaging with customers, said the company. But its force majeure on supplies has already unsettled markets as petrochemicals remain a key pillar of the Republic’s export economy, worth S$1 billion in July alone.
An Aster spokesperson told The Business Times: “Aster has engaged with its customers and will continue to do so. The company’s top priority is to resume production safely. Normal operations continue in the rest of the non-affected plants.”
Aster Chemicals and Energy is a joint venture between Indonesia’s Chandra Asri Pacific, the country’s largest integrated petrochemical producer (80 per cent), and Switzerland’s Glencore, the global commodity trading giant (20 per cent). It was established in mid-2024 following its rebranding from Shell Singapore’s Energy and Chemicals Park.
Brian Leonal, Asia-Pacific head of petrochemicals pricing at Argus, stressed Aster’s importance in the market, even though the force majeure notice did not specify which products were hit.
“Aster is Singapore’s only producer of ethylene glycol and styrene monomer, which are exported to China and India primarily,” he said, noting that the company’s output – 1.1 million tonnes of ethylene glycol and 870,000 tonnes of styrene monomer a year – is significant. “So we can expect a direct impact on ethylene glycol and styrene monomer,” Leonal added.
In response to BT’s queries on overall impact and possible contingency plans, a spokesperson for the Singapore Economic Development Board (EDB) said that the governmental agency is “closely monitoring the situation”. The spokesperson added: “We are in contact with Aster Chemicals and Energy and its affected customers, and are prepared to assist if needed.”
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According to Reuters’ report on Thursday (Aug 28), the cracking facility, which had already been under planned maintenance since Aug 1, was supposed to resume operations in the first half of September. Aster declared a force majeure due to an “unforeseen event” at its ethylene cracker complex, which plays a critical role in Singapore’s petrochemical value chain.
“These shortfalls of Singapore-origin ethylene glycol and styrene monomer will be filled by other producers in North-east Asia and the Middle East,” noted Leonal.
Ethylene glycol is commonly used to make polyester fibres and antifreeze, while styrene monomer is a key ingredient in plastics and foam packaging.
But, Leonal added that because the outage was during a scheduled maintenance, Singapore’s petrochemical exports would have taken a hit even without the force majeure. “A prolonged delay would indeed affect Singapore’s petrochemical exports even further.”
Singapore is a major refining and petrochemical hub in Asia, with companies such as Shell, ExxonMobil, and Aster operating complex facilities on Jurong Island and Bukom.
The country exported S$1 billion worth of petrochemicals in July alone, accounting for 3.7 per cent of total domestic exports of major non-oil products, according to government data.
Fresh trade data also underscores how exposed Singapore’s export mix is to petrochemical shocks. Enterprise Singapore’s July update showed that petrochemical exports contracted by 23.4 per cent, or S$0.3 billion from a year earlier, dragging non-electronic non-oil domestic exports down by 6.6 per cent.
Downstream ripple effects
Leonal pointed out that there would be an indirect impact as well from the shutdown. “Aster supplies (the) building blocks of Singapore’s other downstream petrochemical products, such as butadiene for synthetic rubber, propylene for phenol, vinyl acetate monomer, and allyl alcohol,” he explained.
These downstream producers may have to tap spot markets to procure the feedstocks needed to support operations, as was the case during a 2016 incident, when Shell’s Bukom cracker shut for nine months due to a damaged column, he added.
Joyce Lee, director of olefins and derivatives for South-east Asia at S&P Global Commodity Insights, said that as the prolonged shutdown at the Bukom facility was during a planned maintenance, the immediate market effect would be minimal, but that is contingent upon how long the outage will last.
Similarly, Kate Lee, associate director of aromatics at the market intelligence provider, noted: “The immediate impact to the market is expected to be little as producers usually prepare sufficient inventory stockpiles to last through the maintenance shutdown.”
