Typhoon In-Fa batters east China; some ports temporarily closed

SINGAPORE (ICIS)–Typhoon In-Fa was battering east China on Monday, muting petrochemical trades amid transportation disruption and closure of some ports.

In-fa first landed at Zhoushan in Zhejiang province on midday on 25 July, packing a maximum wind speeds of 38 metres per second, according to the China National Meteorological Centre, and made a second landing on Monday morning at Pinghu in the same province.

Neighbouring regions along the east coast including Shanghai, Jiangsu and Anhui are all affected.

The ports in Zhejiang and Shanghai had been shut since 23/24 July and re-opening time is not clear yet.

Zhoushan-based Zhejiang Petrochemical suspended cargo deliveries late last week but did not adjust operating rates at its refining and petrochemical complex, which is already running at relatively low capacity, a company source said.

The logistics issue from the typhoon has caused the company’s gasoline and diesel inventories to grow, the source added.

Heavy rains have disrupted cargo movements and caused a deluge at some warehouses.

A number of factories making plastic products in Zhejiang shut operations.

Transactions at major petrochemical markets, such as polyethylene (PE) and polypropylene (PP), turned sluggish, with prices slumping.

At the Dalian Commodity Exchange (DCE), PE and PP futures prices lost more 2.0% at the close of trade on Monday.

“Last week, prior to the coming of typhoon, some inventories building pushed up prices of purified terephthalic acid (PTA) a little bit,” a Zhejiang-based trader said

“Now, [the] sentiment weakened and prices began to drop,” the trader added.

At the Zhengzhou Commodity Exchange, purified terephthalic acid (PTA) futures fell 0.7% at the close of trade.

Shanghai Petrochemical and Ningbo-based Zhenhai Refining & Chemical Co (ZRCC) also maintained normal operations, but have temporarily halted cargo shipments, sources from the companies said.

In Shandong, Rizhao port was shut on Monday, while other ports, including Qingdao, Longkou, Yantai and Laizhou are still open.

Producers will have to deal with rising inventories for the duration of In-Fa.

Last week, central China was inundated by heavy rains and flooding, which also disrupted delivery of petrochemical cargoes.

Focus article by Fanny Zhang

Additional reporting by Lucy Shuai, Patricia Tao, Anita Yang and Angie Chen