Polyester, PTA makers in Zhejiang brace for possible power cuts

22 June 2010 10:42  [Source: ICIS news]

SINGAPORE (ICIS news)--Polyester and purified terephathalic acid (PTA) producers in China’s Zhejiang province have been informed by the provincial government to be prepared for possible power cuts ahead of the peak summer season, which could affect their plants' operating rates, sources said on Tuesday.

“We do not know if there will be a direct impact to production. It is still unclear to what extent electricity supplies will be reduced. We also do not know exactly when will this reduction take place,” said a source from Japanese PTA maker Mitsubishi Chemical.

Mitsubishi Chemical owns and operates a 600,000 tonne/year PTA unit at Ningbo, in Zhejiang province, and it is one of the PTA makers that was notified by the government about potential reductions in electricity supply from July to September. 

A source from Yisheng Petrochemical, which has 1.1m tonnes/year of PTA production capacity in Ningbo, said: “We are keeping an eye on the issue and seeing if there would be any impact to our operations.”

Each summer, the Zhejiang provincial government issues such warnings to industrial businesses as the season's high temperatures and humidity bring about a surge in demand for electricity.

But polyester and PTA makers have usually been able to secure alternative sources of power or make adjustments to their operations to keep production going smoothly.

“The power-saving policy had been there for years, but had never had much impact on polyester production,” said a source from POY maker Xing Feng Ming.

He added that a total shutdown in operations would be unlikely, as such interruptions to production would result in high losses for the company. The source added that, in the event of a power cut, it would be more likely for the company to reduce operating rates by 10-20%.

“The power-saving policy could have some impact on the production of polyester products but it would never lead to an insufficient supply, as China has more than enough capacity to satisfy the local demand,” said a source from POY maker Zhejiang Rong Sheng.

Other paraxylene (PX) and PTA makers in Zhejiang, such as Zhenhai Refining and Chemical Corp and Formosa Chemical and Fibre Corp, have their own electricity supplies and do not expect any impact from the provincial government's energy-saving policy, sources said.

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By: Bohan Loh
+65 6780 4359



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