UpdateChina's Sinopec plans PE,PP production cut in March

09 March 2012 05:47  [Source: ICIS news]

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SINGAPORE (ICIS)--China’s Petrochemical major Sinopec plans to reduce its polyethylene (PE) and polypropylene (PP) production output by 50,000 tonnes in March as a result of a decrease in operating rates at its upstream cracker to 90-95% industry sources said on Friday.

The affected PE/PP production lines belong to Sinopec’s subsidiaries; Maoming Petrochemical, Zhongyuan Petrochemical, Yangzi Petrochemical and Qilu Petrochemical, market sources said.

A production loss of 50,000 tonnes in March is about 5.5% of February's total output for Sinopec and all its subsidiary companies, estimated at 488,000 tonnes of PE and 410,000 tonnes of PP, according to Chemease, an ICIS service in China.

However, March production cut may not impact the market significantly because of prevailing low downstream demand.

Production is curtailed by introducing a brief shutdown or reducing operating rates of the plans, they added.

Maoming Petrochemical plans to cut PE and PP’s production outputs by a total of 19,300 tonnes, which includes 3,500 tonnes of linear low density PE (LLDPE), 5,000 tonnes of low density PE (LDPE), 4,500 tonnes of high density PE (HDPE) and 6,300 tonnes of PP, a company source said.

Qilu Petrochemical will cut LLDPE production output by 4,500 tonnes and PP by 2,000 tonnes, a source close to the company said.

Zhongyuan Petrochemical will reduce its LLDPE production output by 4,000 tonnes and PP by 3,000 tonnes, a source close to the company said.

Yangzi Petrochemical will cut its LLDPE production output by 5,000 tonnes, a company source said.

Besides, Sinopec’s invested companies may also cut their PE, PP production outputs, industry sources said.

Sinopec’s SABIC Tianjin Petrochemical Petrochemical plans to trim 8,000 tonnes of LLDPE, said a source close to the company.

BASF-YPC Company Ltd is likely to reduce output of LDPE by 5,000 tonnes in March, but this could not be immediately confirmed with the producer.

Some local traders expect buying activity to pick up, following the news of Sinopec’s production cut.

Sinopec could not be immediately reached for comments.

Additional reporting by Ong Sheau Ling, Lizzie Yu, Rain Dong and Angie Li

By: Amy Yu

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