Virus-related restrictions in north China hit petrochemical transport

Author: Yvonne Shi

2021/01/13

SINGAPORE (ICIS)--Coronavirus-related restrictions in parts of northern China - including Hebei province, where cases of infections recently spiked - are hitting transport of petrochemicals in the region.

A total of 73 medium-risk communities or villages were identified in the provinces of Liaoning, Hebei, Heilongjiang and in the Chinese capital of Beijing.

These were placed under varying degrees of restrictions, while a total lockdown is in place in Gaocheng County in Shijiazhuang – the capital of Hebei. By 12 January, Hebei has also placed two other cities - Xingtai and Langfang - in lockdown.

New coronavirus cases were also recorded in Shanxi, Shaanxi and Jilin provinces.

Transportation of methanol in Hebei is restricted mainly for “short-distance” deliveries, market sources said.

Hebei, which is an industrial hub, serves as a transit point for most commodities coming from and going into the northern region.

For methanol, some disruptions were noted in the transport of cargoes from Inner Mongolia to Shandong in the east, sources said.

Polypropylene (PP) cargoes from Shijiazhuang could not be sent out for delivery at the moment, a polyolefins trader said.

The city's 220,000 tonne/year PP plant supplies to Tianjin and neighbouring areas in the north.

The PP producer has arranged for early deliveries last week to keep its stocks low and planned to transport cargoes by rail instead of by trucks in the near future.

Among producers within Hebei, Sinopec Shijiangzhuang Refining & Chemical sharply reduced its xylene prices by yuan (CNY) 400/tonne and toluene by CNY300/tonne on 7 January amid rising coronavirus cases in the city.

Jilin Chemical Fiber Group's acrylic fibre plant in the high-risk area of Gaocheng is running at extremely low rate of around 20% because of feedstock shortage amid the transport restrictions.

The plant sources its feedstock acrylonitrile (ACN) from the eastern provinces of Jiangsu and Shandong, and the company is currently negotiating with the local government on transport of the materials, a market source said.

Changshan Beiming, a listed textile company based in Shijiazhuang, has suspended operation under local epidemic prevention requirements.

With Hebei under strictest transport control, the surrounding provinces of Shanxi and Liaoning are also seeing tightening controls on transportation at expressways.

The coronavirus outbreak started in late 2019 at the Chinese central city of Wuhan. Surging cases of infections at the time had prompted the country to implement a severe lockdown from late January 2020, which was gradually lifted through to April.

Economic activity had slumped in the first two months of 2020 but has since rebounded.

Although the recent increase in coronavirus cases was nowhere near the levels seen in early 2020, Chinese authorities are implementing lockdowns on certain areas as a precaution against any worsening of current conditions.

On 12 January, 29 out of 34 provinces/municipalities in the country have called for bans on travels during the week-long Lunar New Year holiday on 11-17 February.

China's confirmed coronavirus cases stood at 97,754, with the death toll at 4,800, as of 12 January, according to data from the World Health Organization (WHO).

Focus article by Yvonne Shi

Photo: At Tianjin Port in north China, 11 January 2021. (Source:
Xinhua/Shutterstock)

Visit the ICIS Coronavirus topic page for analysis of the impact on chemical markets and links to latest news.

ICN