South Korea's port of Daesan, which lies along the country's west coast, has been closed since Saturday due to bad weather and may remain closed till mid-week, traders said Monday, adding that vessels could face delays of between one and four days, Platts reports.
"The port was closed on Saturday but there's a chance that it could resume operations by tomorrow [Tuesday] afternoon if weather conditions improve," a trader said Monday. "In the worst case scenario though, if the poor weather continues, the port may be closed till November 14," the source said.
"There was a warning that a storm is approaching so the port was closed for safety as the windy conditions would make it difficult for vessels to berth," he added.
Companies such as Honam Petrochemical, Samsung Total and LG Chem have petrochemical plants in Daesan, and receive naphtha feedstock for their naphtha-fed steam crackers via vessel deliveries at Daesan port.
The Daesan Port Authority could not be reached for comment Monday, but traders said they had been informed of the port closure from their network of port brokers and industry agents.
"Daesan can be a difficult port to handle - it has rough seas during the winter months so ships have to slow down and it tends to be very windy and foggy, and it sometimes freezes as well which makes berthing difficult, so it can be hard for end-users to control [naphtha feedstock] inventories sometimes," another source said.
Traders said, however, that the impact of the closed port on naphtha feedstock deliveries for affected end-users might be limited.
"It depends on the end-user, but I think they should be all right - most of them should have received their naphtha deliveries at the beginning of November," the first source said.
Apart from vessel deliveries, a third source said Honam, Samsung Total and LG Chem also receive term naphtha volumes from South Korea's Hyundai Oilbank, which has a 390,000 b/d refinery at Daesan that delivers naphtha to its customers via pipeline.
"The impact at the moment should be limited but in any case, there's nothing that they can do if the port is closed," the source said, adding however that if naphtha feedstock inventories start to run low, end-users may have to eye reducing naphtha-fed steam cracker run rates.
Another source also said that depending on the duration of the port closure, there might be stronger end-user demand for spot cargoes for restocking purposes should there be a significant drawdown in naphtha inventories.
Officials at Honam Petrochemical, Samsung Total and LG Chem could not be reached for comment Monday afternoon.
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