Singapore (Platts)--29Jul2011/732 am EDT/1132 GMT

Asia styrene monomer prices hit three-year highs Thursday on supply concerns for August and September due to turnarounds and unknown restart dates for three plants that were shut unexpectedly, market sources said Friday.

FOB Korea was assessed Thursday at $1,503.50/mt, the highest level since August 4, 2008, when it was at $1,522.50/mt, while CFR China was assessed at $1,529.50/mt, the highest since July 31, 2008, when it was at $1,556.25/mt.

"I think [the prices went up] mainly because of low inventory and expectation of short supply from Formosa Chemical & Fiber Co. and Shanghai Secco," a Chinese end-user said.

The port inventory level of SM in East China shrunk further this week by about 4,500 mt to 63,500 mt, sources said, and this compares with 75,000 mt in the last week of July 2010.

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"The market is strong because demand is healthy in the third quarter and [there are] many shutdowns among major producers," a South Korean SM producer said.

A pipeline fire at Formosa Petrochemical's refinery in Mailiao, Taiwan, late Tuesday, may delay the restart of its No. 1 naphtha-fed steam cracker, a company source said Wednesday. Market participants were worried the incident might delay the restart of several petrochemical plants, including two idled SM plants belonging to Formosa Chemical & Fibre Co. at Mailiao. The No. 1 and No. 2 SM plants, with a combined capacity of 600,000 mt/year, were shut May 12 following a previous fire at an LPG pipeline at the Mailiao complex. An FCFC company source would not comment on whether the latest fire could delay the approvals required to restart the SM plants. The plants had been expected to restart in August, but are awaiting approval from the authorities.

Also Taiwan Styrene Monomer Corporation has not been able to restart its 180,000 mt/year No. 1 plant in Lin Yuan which was shut July 4 due to feedstock problems.

In China, Shanghai Secco will shut its 650,000 mt/year SM plant for 45 days of turnaround from August 1, market sources said, but that could not yet be confirmed with the company.

In Japan, Nihon Oxirane will shut its 425,000 mt/year plant for 40 days of turnaround from the end of August, while Asai Kasei will shut its 390,000 mt/year plant at Mizushima for 40 days in September.

Some market sources were also expressing concern that Shell's SM plants in Singapore might be affected when the company shuts its naphtha-fed steam cracker at Pulau Bukom for 40-45 days of maintenance from August 11. However, Shell would not comment on this.

The company has a 315,000 mt/year SM plant, and a 550,000 mt/year SM/propylene oxide plant under the joint venture with BASF, Ellba Eastern, both located in Singapore.

--Gustav Holmvik, gustav_holmvik@platts.com