Heavy plant turnarounds may not lift China Q2 PE, PP prices
Angie Li
13-Apr-2017
Focus article by Angie Li
SINGAPORE (ICIS)–A heavy turnaround schedule at Chinese polyolefins plants will reduce domestic supply, but this may not lift polymer prices in the second quarter due to lacklustre demand, market sources said.
Production loss is estimated at around 400,000 tonnes due to the scheduled maintenance at Chinese polyethylene (PE) and polypropylene (PP) plants during the March to June period, according to data compiled by the China editorial team at ICIS. (Please see table below)
Domestic polyolefin prices have been stable from end-March, with LLDPE prices at yuan (CNY) 9,400/tonne and PP yarn at CNY8,283/tonne on 12 April, according to ICIS data.
Prices had lacked any upward momentum in March amid a slow offtake of cargoes, traders said.
In March, LLDPE average prices declined by 3%, while PP yarn prices shed 3.5%.
Downstream players in China have mixed expectations on the PE, PP market going forward, with no significant improvement in demand.
“We still have ample raw materials in stock,” said a household appliance producer, citing weak sales of finished products since the beginning of this year.
Industry sources said that recent start-ups of polyolefin units overseas might, to some extent, offset the impact of reduced supply in the domestic market.
In India, ONGC Petro-Additions Ltd (OPaL) put into operation early this year a 340,000 tonne/year high density polyethylene (HDPE) unit, and two swing HDPE/linear low density PE (LLDPE) lines with a combined capacity of 720,000 tonnes/year, according to market sources.
The company was understood to have started making offers for April-loading cargoes to China.
In Iran, Bakhtar Petrochemical Company started up its new 300,000 tonne/year low density polyethylene (LDPE) unit in Kordestan in March, industry sources said, adding that it might start offering cargoes to the Chinese importers soon.
A modified PP manufacturer holds a negative outlook on the Chinese market due to tight cash flow as market players are having difficulty securing new loans since late last year. It is a view shared by BOPP and PP tape makers.
PE film and cable producers noted improving product sales compared with the first quarter, although still weak compared with the same period last year.
The week-long Lunar New Year holiday in China on 27 January to 2 February has had a dampening effect on the country’s overall polyolefin demand in the first quarter.
Shutdown schedule of China PE plants
|
Company |
Plant |
Capacity (tonnes/yr) |
Location |
Start of shutdown |
Restart date |
|
Qilu Petrochemical |
LDPE |
140,000 |
Shandong |
06-Mar |
end-April |
|
Shanghai Golden Philips |
HDPE |
135,000 |
Shanghai |
05-Mar |
10-Apr |
|
Yangzi Petrochemical |
HDPE |
185,000 |
Jiangsu |
30-Mar |
05-Apr |
|
Maoming Petrochemical |
HDPE/LLDPE |
200,000 |
Guangdong |
21-Mar |
02-Apr |
|
Shannxi Shenmu Chemical |
LDPE |
300,000 |
Shannxi |
15-Mar |
26-Mar |
|
Shanghai Petrochemical |
LDPE |
90,000 |
Shanghai |
05-Apr |
26-May |
|
Shanghai Petrochemical |
LDPE |
100,000 |
Shanghai |
18-Apr |
27-May |
|
Shannxi China Coal Yulin Chemical |
HDPE/LLDPE |
300,000 |
Shannxi |
20-Apr |
20-May |
|
Shenhua Xinjiang energy |
LDPE |
270,000 |
Xinjiang |
15-Apr |
15-May |
|
Fushun Petrochemical |
HDPE |
110,000 |
Liaoning |
10-May |
25-Jun |
|
Fushun Petrochemical |
HDPE/LLDPE |
450,000 |
Liaoning |
10-May |
25-Jun |
|
Fushun Petrochemical |
HDPE |
350,000 |
Liaoning |
10-May |
25-Jun |
|
Yangzi Petrochemical |
HDPE |
260,000 |
Jiangsu |
23-May |
01-Jul |
|
Yangzi Petrochemical |
HDPE/LLDPE |
200,000 |
Jiangsu |
29-May |
11-Jul |
|
Qilu Petrochemical |
LLDPE |
140,000 |
Shandong |
05-May |
20-Jun |
|
Qilu Petrochemical |
LDPE |
140,000 |
Shandong |
05-May |
20-Jun |
|
Qilu Petrochemical |
HDPE |
390,000 |
Shandong |
05-May |
20-Jun |
Shutdown schedule of China PP plants
|
Company |
Plant |
Capacity (tonnes/yr) |
Location |
Start of shutdown |
Restart date |
|
Huabei Chemical |
PP |
100,000 |
Hebei |
19-Mar |
early May |
|
Hebei Haiwei |
PP |
300,000 |
Hebei |
04-Mar |
25-Mar |
|
Dalian Petrochemical |
PP |
270,000 |
Liaoning |
21-Mar |
15-Mar |
|
Sinopec SK Wuhan Petrochemical |
PP |
200,000 |
Wuhan |
26-Mar |
03-Apr |
|
Shannxi Shenmu Chemical |
PP |
300,000 |
Shannxi |
15-Mar |
early April |
|
Yanan Refining and Petrochemical |
PP |
300,000 |
Shannxi |
15-Mar |
15-Apr |
|
Yangzi Petrochemical |
PP |
360,000 |
Jiangsu |
30-Mar |
06-Apr |
|
Changzhou Fund Energy |
PP |
300,000 |
Jiangsu |
30-Mar |
30-Apr |
|
Guangzhou Petrochemical |
PP |
200,000 |
Guangdong |
04-Mar |
20-Mar |
|
Maoming Petrochemical |
PP |
200,000 |
Guangdong |
05-Apr |
05-May |
|
Qilu Petrochemical |
PP |
70,000 |
Shandong |
05-May |
20-Jun |
|
Fushun Petrochemical |
PP |
390,000 |
Liaoning |
10-May |
25-Jun |
|
Yangzi Petrochemical |
PP |
400,000 |
Jiangsu |
23-May |
11-Jul |
|
Shannxi China Coal Yulin Chemical |
PP |
300,000 |
Shannxi |
20-Apr |
20-May |
|
Shenhua Xinjiang Energy |
PP |
450,000 |
Xinjiang |
15-Apr |
15-May |
Source: China editorial team at ICIS
($1 = CNY6.89)
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