Recently, the number of domestic polypropylene PP installations and maintenance has continued to increase. Up to now, a total of 50 manufacturing lines have been involved in parking and maintenance, affecting a production capacity of up to 11.57 million tons per year. Maintenance losses of domestic polypropylene plants in August were 559,900 tons, reaching the highest single-month maintenance loss in history, with a month-on-month increase of 34.95% and a year-on-year increase of 65.50%. This scale exceeded the expectations of most market participants.
Maintenance is mainly concentrated in East China, Northwest China and Northeast China, accounting for 36%, 21% and 20% respectively. East China’s Donghua Ningbo Phase 1 and Phase 2 front lines are scheduled for maintenance and are expected to be operational in September; Northwest China’s Shenhua Xinjiang is scheduled to be shut down within the month and scheduled to be used in September; Northeast China’s Haiguolong Oil Second Line and Fushun Petrochemical are still shutting down , the start-up time is to be determined… Generally speaking, the number of maintenance equipment of domestic polypropylene production companies increased during the month, and the maintenance time of some equipment was longer, so the maintenance losses in August increased compared with the previous month.
Large-scale maintenance of more than 100 chemical plants affects 15 million tons of production capacity
In fact, not only PP, but also methanol, hydrogen peroxide, urea and other chemicals have recently undergone large-scale maintenance, covering nearly a hundred chemical companies, affecting more than 15 million tons of production capacity, and the parking market ranges from one week to 50 days. Some companies have yet to announce their resumption time.
Due to the persistence of high temperatures, urea plants such as Sichuan Jiuyuan began to shut down their entire operations on August 13. Sichuan Lutianhua and Tianhua plants began to shut down their operations in the early morning of August 15. As of now, almost all urea plants in Sichuan and Chongqing have shut down their operations. , including a total of 17 parking and reduction companies, the daily production capacity of urea is 139,900 tons, a decrease of 11,800 tons compared with the same period last year; the operating rate is 62.67%, a decrease of 7.67% compared with 70.34% in the same period last year.
In August, domestic equipment involved in the production of polyethylene pipe materials was newly added to a northeastern enterprise and the Lanhua Yulin unit was shut down for maintenance. The annual production capacity involved in the maintenance was 800,000 tons. The parking device involves 16 sets of polyethylene devices, such as Shanghai Petrochemical, Maoming Petrochemical, Yulin Chemical, Daqing Petrochemical, etc.
This month, Salt Lake Magnesium, Henan Shenma, Hengyang Jiantao, Xinjiang Zhongtai, and Ningbo Formosa Plastics are undergoing maintenance or are about to start maintenance, involving a production capacity of more than 4 million tons.
Henan Kaixiang will undergo one-month maintenance on August 10, Sichuan Tianhua will stop for maintenance on August 15, Shaanxi Chemical will replace the catalyst on August 20, Lanshan Tunhe will conduct annual inspection on August 23, and Shaanxi Black Cat will conduct maintenance on August 31 One month, Yanchang Petroleum will conduct maintenance on September 1st, Yizheng Dalian will conduct maintenance on September 1st, and some devices will maintain 60-70% load operation.
The current unit of Blue Star Harbin Petrochemical’s 150,000 tons/year phenolic and ketone unit was shut down for maintenance at the beginning of the month. It is expected to be shut down for about 50 days. Details are being followed up, and sales will be suspended during the shutdown.
Yanhua Polycarbon’s 150,000 tons/year bisphenol A unit will be shut down for maintenance for about a month.
Sinopec Mitsui’s 120,000 tons/year bisphenol A unit will be shut down for maintenance for about a month.
As of August 26, the PTA operating rate was 68.2%. A 2 million-ton PTA unit in South China was initially planned to reduce its load to 70% in early September. A 640,000-ton PTA unit in East China was scheduled to be shut down for maintenance in early September. The maintenance is expected to take 20 days. Nearby, it is expected that PTA’s operating load will continue to be significantly limited. Chuaneng Chemical’s PTA unit with an annual output of 1 million tons was shut down on the evening of August 16, and the restart time is to be determined.
The methanol production capacity utilization rate in Southwest China was 53.43%, -14.02% from last week. At present, this part of the methanol unit has been shut down for maintenance from August 13 to August 16, and the maintenance time is tentatively estimated to be about a week.
Starting from the second half of the month, power rationing began in Sichuan, and yellow phosphorus companies stopped operations. The Weng’an area of Guizhou has been closed due to the epidemic, and the transportation of yellow phosphorus has been restricted in some areas, making it more troublesome than before. Some companies in Yunnan are undergoing maintenance and quotations have been suspended.
In the acetic acid market, some factory equipment was shut down for maintenance, and the supply on site was reduced.
Zhejiang Juhua’s caprolactam production capacity is 100,000 tons, and it will be shut down for maintenance for about half a month starting from August 18.
Haili Chemical Group has a total caprolactam production capacity of 400,000 tons; Shandong Haili has 200,000 tons, and the device is shut down.
Jiangsu Dafeng 200,000 tons, one line has been shut down for maintenance since April 1 due to power plant maintenance, and the restart has been delayed, while the other line is shut down.
PDH profits have been losing money this year, and PDH construction starts have been at a low level for the same period in previous years. In August, PDH profits still suffered losses, and construction starts continued to remain low. In August, maintenance of PDH devices such as Donghua Energy Ningbo’s 800,000-ton device and Jinneng Technology were added.
Longer, more, more losses! The maintenance season is “bigly different”, the peak season is cooler…
In the past, August was usually the end of the maintenance season, and then we had to meet the traditional peak season demand of “Golden Nine and Silver Ten”. That isIt is said that the hot and rainy August is not suitable for large-scale maintenance of industrial products, and this year’s earlier and later maintenance obviously lasted for a longer period, and the maintenance losses of chemical products from March to August were all They are very concentrated and are at a high level for the same period in previous years.
For example, in the PP industry, maintenance losses from March to August were as high as 2.458 million tons, an increase of 1.05 million tons year-on-year, and the average monthly maintenance losses reached 410,000 tons; in the PE industry, maintenance losses from March to August were 2.215 million tons, an increase of 1.11 million tons year-on-year. The average monthly maintenance loss reaches 370,000 tons.
At the same time, due to factors such as the spread of the epidemic, the escalation of the Russia-Ukraine conflict, international crude oil shocks, the intensification of the energy crisis, and rising global inflation, most chemical companies have fallen into an abyss of losses since the beginning of the year and have therefore begun to proactively reduce production. With the gradual weakening of crude oil prices in the middle of the year, the profits of various chemical products have deteriorated to varying degrees, and many installations have suffered continuous losses. The loss per ton of oil-based PP is as high as about 2,000 yuan/ton, and the profit is at a historical low. A series of operations such as production reduction, maintenance, and lower operating rate were carried out in one go.
For the chemical market, the relationship between supply and demand is an important factor affecting prices. The reduction of the supply side will lead to tight supplies and rising prices, and price increases will also come naturally. However, this year’s situation, the downstream situation is not optimistic, and domestic sales continue to be sluggish, and foreign trade has almost stagnated. The shutdown of downstream manufacturing plants has even evolved from a few days or weeks to a three-month or half-year holiday. This situation of “untimely death” of downstream collectives also determines that chemical companies in the upstream of the industrial chain will not be very profitable, and even fall into the trap of “increasing thickness without increasing profits”. As a result, there are more downstream maintenance than upstream, which again forces the upstream to reduce production or even perform maintenance.
So whether this large-scale and long-term production reduction will bring about routine “tight goods and rising prices” and a hot trend of rush buying in the downstream, or will it intensify in the downstream holiday wave and become a subjective flattening, with strong costs and weak demand double squeeze How the chemical industry will develop in the future will be dominated by the outcome of the next round of supply and demand game.