The default behavior of Replicat will still be to abend when it encounters an error, even if you have specified a discard file and max number of discards. If you want the Replicat to always discard and continue, you will need to also specify REPERROR (DEFAULT, DISCARD).
If you have already done this, would you please attach the entire Replicat report file?
Thanks Marie. That is the parameter I have been missing.