Home > Chemial News > Valuable News > The "holiday tide" is here! Up to 85 days!

The "holiday tide" is here! Up to 85 days!

Echemi 2021-10-12

Recently, an enterprise in Wuhan, Hubei issued a holiday notice, saying that in response to the needs of employees in various departments, in order to repay the rapid progress in performance in the past three quarters, it has decided to continue to give all employees a happy, peaceful and safe holiday. Vacation arrangements: October 8-12 There will be a holiday from 19:00-9:00 on the 31st, a total of 85 days.


This notice of the holiday until the end of the year made many people feel dumbfounded. Some people say that the holiday time is at night, which is equivalent to a vacation in a dream. Some people say that it is a good performance to take a holiday, but is it actually due to a small number of orders or not being able to work? Is the factory going to complete the "holiday" cancellation in the next step? Although it sounds like a joke, in fact this situation is not uncommon in the near future. At present, most chemical companies in Lianyungang, Yancheng and other places in Jiangsu have suspended production and holiday, and companies in Guangdong, Zhejiang, Chongqing, Chengdu and other places have also issued suspension and holiday notices.


In the fourth quarter of the previous year, I was preparing to do a sprint for a hundred days. Nowadays, many companies "lay flat" on vacation, which is quite surprising. The "holiday" is advanced, but it is not a pour of returning home to go home for the New Year, but a last resort caused by multiple factors such as suspension of production, restricted start, and sluggish downstream orders.


The "dual control" of energy consumption is becoming stricter, and the "restriction order" is upgraded

Since August, under the influence of various factors such as the “dual control of energy consumption” and high coal prices, many places have successively implemented power curtailment and production curtailment measures. More than 20 provinces, cities and regions across the country have encountered power outages and curtailments of varying degrees. More than one listed company announced the suspension of production, and said that it will have a major impact on the company, and tens of thousands of chemical companies have been affected. In previous years, chemical companies that worked overtime during the 11th minor holiday announced their holiday early.


The major textile printing and dyeing town in Zhejiang has suffered a severe setback. Hundreds of companies have power outages and gas, which is equivalent to one-third of the country's printing and dyeing capacity is restricted.


The four subsidiaries of the main yellow phosphorus producer in Yunnan *ST Chengxing suspended production, which had a significant adverse impact on the annual operating results.


Over 1,000 enterprises in Jiangsu, a major chemical province, "opened two and stopped two", and listed companies such as Lanfeng Biochemical, Chenhua Stock, Hongbaoli and other listed companies have suspended production of some or all of their production lines.


Guangdong, a major paint province, implements “open five stop two” and “open one stop six”. If there is no cooperation, it will be sealed up for 10 days.


After the holiday, companies from Xiamen in Fujian, Zhucheng in Shandong, Cixi in Zhejiang, Jiangsu and other places were notified that a new round of "orderly use of electricity" was officially launched, and plans such as "opening four and stopping three" and "opening three and limiting three" were successively launched. It is released, and stipulates that the company's electricity consumption will be continuously monitored online. For those who fail to stop production and curtail electricity in accordance with the regulations, they will take mandatory power outage measures and be held accountable in accordance with relevant policies and regulations.


In addition, Shandong, Guangxi, Ningxia, Qinghai, Henan, Inner Mongolia, Shaanxi, Anhui and other places have also implemented orderly electricity use, and implemented measures to use electricity by staggering and avoiding peaks. This is equivalent to the fact that most Chinese companies are affected by the "double restrictions" and operating rates have plummeted. Some companies were even required to suspend production for 15-20 days each in October, November, and December. During the rest of the time, they had to avoid peak production, and the operating rate fell below 30%.


"Work stoppage order" strikes, 7 provinces and 65 cities affected

In addition to the above-mentioned more than 20 provinces, municipalities and regions that are strictly controlled due to the “dual control” of energy consumption, the fourth quarter is also an important period for the prevention and control of air pollution. The Ministry of Ecology and Environment has also issued an annual routine The “stop work order” of the People’s Republic of China requires key industries to start production at staggered peaks. In the second half of this year, the Ministry of Ecology and Environment issued the "Letter of Opinions on the Comprehensive Treatment Plan for Air Pollution in the Autumn and Winter of 2021-2022 in Key Regions (Draft for Solicitation of Comments)". The deadline for comments is September 22, and the official draft will be released soon


The areas affected by the suspension order this year involve 7 provinces and 65 cities, and the scope of control covers most areas of Beijing-Tianjin-Hebei, Hebei, Henan, Shandong, Shanxi, and Shaanxi. During the autumn and winter period (October 1, 2021 to March 31, 2022), each city has achieved the control targets for the average concentration of PM2.5 and the number of severely polluted days or more. According to the "Draft Opinions", this governance will focus on petrochemical, chemical, coal chemical, coking, steel, building materials, non-ferrous metals, coal power and other industries, and comprehensively sort out the proposed, under construction, and inventory "two high" projects. The "Two Highs" project implements list management, classified disposal and dynamic monitoring.


Now that the fourth quarter has kicked off, many cities have begun to strictly control key industries. The Leading Group for Air Pollution Prevention and Control in Jincheng, Shanxi issued a notice on clarifying the differentiated emergency control measures for enterprises in key industries in the autumn and winter of 2021-2022, requiring enterprises in key industries to operate in the autumn and winter of 2021-2022 (October 1, 2021-2022) 31st) Adopt a regional overall planning approach to implement alternate shutdowns, emission reductions, and differentiated management and control. This emergency management and control involves coal chemical industry, steel industry, cement, coking, brick and tile industry, ceramics industry and other industries. Among them, the coal chemical industry involves Jinmei Group, Lanhua Science and Technology, and Tianze Group's coal chemical industry to limit production as a whole 40 %, the coking industry Shanxi Xinggao Energy Group Co., Ltd. and Shanxi Xinggao Group Sanjia Coking Co., Ltd. will extend the coking time to more than 70 hours from January 25 to March 15, 2022.


Lanhua Kechuang immediately announced that the company's Shanxi Lanhua Clean Energy Co., Ltd. will suspend production from October 1, 2021 to March 31, 2022, and its affiliates Shanxi Lanhua Coal Chemical Co., Ltd., Tianyue Branch, Chemical Branch, and Shanxi Lanhua The five companies of Danfeng Chemical Co., Ltd. and New Materials Branch will stop production from January 25, 2022 to March 15, 2022.


This "stop work order" involves 65 cities in 7 provinces and lasts for half a year. Shaanxi, Henan, Shandong and other places have also been involved in the recent power and production restrictions. It can be described as "dual coverage", as the heating season is approaching. , It is expected that companies in more regions will experience up to six months of production suspension.


Prices of raw materials are rising, downstream is sluggish, chemical companies "lay flat" for holidays

If the “stop work order” and the “power curtailment order” are objective factors, and if the company has to stop production, then the suspension of production and holiday due to excessive pressure caused by the increase in the price of raw materials, the upstream out-of-stock order, etc. is subjective Willing.


Since the epidemic last year, the prices of bulk commodities have continued to rise. Titanium dioxide products have risen for 8 consecutive rounds, and the monthly increase must be on the list; emulsion giant hair letter increases have been one after another, and the prices of all commodities have been basically covered; basic chemicals The leading company Wanhua Chemical increased prices frequently, with 12 consecutive increases in the first half of the year. Superimposed on high oil volatility, urgent coal resources, and 7-year highs in natural gas prices have led to tight prices in the entire chemical industry chain.


The downstream market is not optimistic. Since the beginning of this year, a total of 244 domestic real estate companies have closed down, leading real estate companies such as Evergrande and Fantasia have exploded. It is also unable to accept on time, and the capital chain of chemical companies is facing a crisis of rupture. Cheetah Motors, Lifan Motors, Huatai Motors, and Zotye Motors are also on the verge of bankruptcy. Industries such as aluminum profiles, building materials, furniture, and home improvement have been dying under the influence of the epidemic, and their demand for chemical materials has also continued to be low.


On the one hand, the price of raw materials is soaring and the supply of goods is in short supply. In order to maintain the capital chain, it is impossible to stock up too much; on the other hand, even if the raw material inventory in hand is not urgent, the operating rate of the enterprise is reduced, and the number of products produced is limited. Ensure that the products are shipped on time, the order completion rate is low, the delivery time is extended, the order volume is reduced, and the cost pressure cannot be transmitted to the downstream. Under the double attack of upstream and downstream, companies make one single loss, and the more they do, the worse the loss. This abnormal situation makes the company have to choose to "lay flat."

Share to:
Disclaimer: Echemi reserves the right of final explanation and revision for all the information.

Scan the QR Code to Share

Send Message