China's local PE supply may be squeezed in Q2 on major turnarounds

03 February 2012 09:39  [Source: ICIS news]

By Amy Yu

SINGAPORE (ICIS)--China’s domestic polyethylene (PE) supply for the second-quarter is expected to tighten if Sinopec and China National Petroleum Corp (CNPC) carry out plans for major maintenance of their plants, industry sources said on Friday.

“The capacity loss of domestic [China] PE grades in second quarter 2012 is expected to be 219,600 tonnes if the plants are shut as scheduled,” a market player said.

PE output is predicted to be around 2.69m tonnes in the second quarter this year, from 2.71m in the same period last year, a 0.6% decrease, according to Chemease data.

The decrease in capacity output for PE will likely drive market prices up in the second quarter though import volumes at the time and the downstream demand will actually determine the change, market sources said.

Sinopec subsidiaries that include Zhenhai Refining & Chemical, Shanghai Petrochemical, Qilu Petrochemical and Zhongyuan Petrochemical have plans to shut their plants for maintenance during the April-June period.

Zhenhai Refining & Chemical plans to shut its 450,000 tonne/year linear low density polyethylene (LLDPE) unit in Zhejiang province in April for 5 days, a source close to the company said.

While Shanghai Petrochemical is scheduled to shut its 100,000 tonne/year low density polyethylene (LDPE) unit in June for 15 days, and its 250,000 tonne/year high density polyethylene (HDPE) unit in June for 25 days, a source close to the company said. Both plants are located in Shanghai.

Qilu Petrochemical plans to shut its 140,000 tonne/year LDPE unit, both its 70,000 tonne/year HDPE units and a 140,000 tonne/year LLDPE unit at Qilu in Shandong province in May for 23 days, according to a source close to the company.

Zhongyuan Petrochemical plans to shut its 260,000 tonne/year LLDPE unit located in Henan in June for 10 days, a company source said.

Whereas, Jilin Petrochemical, a subsidiary of CNPC, plans to shut down both its 275,000 tonne/year LLDPE unit and 300,000 tonne/year HDPE units at Jilin in May for 36 days of maintenance, a company source said.

Lanzhou Petrochemical also plans to shut its 300,000 tonne/year LLDPE unit, 200,000 tonne/year LDPE units and 170,000 tonne/year HDPE unit located at north-western Gansu province in April for 45 days.

Additional reporting by Angie Li, Rain Dong, Lizzie Yu

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