n e w s of t h e w e e k a meeting to be held by the Genevabased International Labor Organization in early 1999- Among the points that ICEM General Secretary Vic Thorpe intends to make: "RC must stand for real commitment. The ICEM and its affiliated unions could help make Responsible Care a much more credible, verifiable, and forward-looking means of tackling the challenges facing the global chemical industry. But this means that companies for their part must involve trade unions as full partners in the program." Patricia Layman
spelling out the exact method used, a staff member at ethylene producer LG No C&EN on Dec.29 Petrochemical says his company has Chemical & Engineenng News will not been paying cash for its naphtha in the publish an issue on Dec. 29, 1997. The past few weeks. editors wish all of our readers a joyous KPIA's Park says producers have comholiday season. Our next issue will be plained to the authorities. They have Jan. 5, 1998. asked government officials to monitor naphtha levels held by producers. At this point, he says some companies will run come so uncertain, that both Korean and out of raw material early next year. Othinternational banks are very reluctant to is- er raw materials needed by the chemical sue letters of credit—banking documents industry could also be in shortage. that importers use to pay their suppliers in It takes three to four weeks for a "fast foreign countries. A bank issuing a letter of shipment" of naphtha to reach Korea, credit at the request of an importer tempo- explains ING Barings chemical analyst rarily assumes the financial obligation of Bill Hunsaker, based in Seoul. That is the importer to pay the overseas supplier. why the current drop in imports of the "Our country has some problems. Our raw material will not be felt until January banks are not opening letters of credit for when, Hunsaker expects, operating rates South Korea's petrochemical production the import of naphtha," admits Hoon Park, at petrochemical producers could drop is likely to drop in January because some managing director of the Korea Petro- to 50 or 60%. producers are having difficulty financing chemical Industry Association (KPIA). At But Hunsaker expects a fairly quick their imports of naphtha, the raw materi- Hyundai Petrochemical, for instance, the end to the crisis. "Korea will solve its al they use to produce ethylene. Imports normally ebullient spokesman B. M. Lee is problems, most likely within three supply about half of South Korean pro- having difficulty projecting the not-a- months," he says. KPIA's Park is more opducers' requirements, and current inven- worry-in-the-world image Hyundai is fa- timistic. He expects that Korean imports tories will last just a few weeks. mous for. "Now, we have a little bit of dif- of naphtha and other raw materials will It is not clear how long the problem ficulty import [ing] naphtha, but not a big reach normal levels by early next year. Jean-François Tremblay will persist or how it will be resolved. problem," Lee says. Hyundai's naphtha reLower Korean production would pro- quirement will double to 2.6 million metvide some respite to Asian commodity ric tons next year as a new petrochemical chemicals markets, which had been ex- complex gradually comes on-line. pected to be oversupplied. But the new One naphtha importer at a Korean situation poses the question of how trading firm tells C&EN that his company heavily indebted Korean chemical pro- brought naphtha into Korea without usducers will meet their obligations if they ing letters of credit. But the exercise has Transportation officials and fuel and can't get the raw materials they need to not been satisfactory. "We want to use combustion experts are looking into make what they sell. letters of credit in the future," he says, the feasibility of fuel changes to preThere is such a shortage of cash, and fi- not elaborating on the problems associat- vent a repeat of the July 1996 explosion nancial conditions in South Korea have be- ed with the alternative. And without that ripped apart TWA Flight 800 just after takeoff from New York City. Lower fuel temperatures and a shift to fuel with a higher flash point—the temperature at which its vapor will ignite—may result. Although the ignition source remains a mystery, investigators agree that Flight 800 was brought down by a fuel-vapor explosion in its center fuel tank. Fueltank temperatures were elevated because the aircraft's air conditioners, which can become quite warm and are located under the center tank, had been running for several hours before the plane took off. In testimony earlier this month at a hearing before the National Transportation Safety Board (NTSB), Joseph E. Shepherd, head of the Explosion Dynamics Laboratory at California Institute of Technology, said his research shows that these conditions made the fuel vaSamsung's naphtha cracker in Sosan, southeast of Seoul.
Korean financial woes hit chemical makers
Fuel change may be Flight 800's legacy
10 DECEMBER 22, 1997 C&EN
