The 'Stop Work Order' Is Here! 6 Months In 65 Cities!

The Winter Olympics will be held in the near future. Heavy industry companies in North China, West China, and Huaibei will be closed for holidays for up to 67 days. As soon as the news came out, it caused waves of waves. Many netizens said that they had received notifications. Work is about to be suspended, and year-end finishing work will be carried out to prepare for the holding of the Winter Olympics.

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The recent production suspension has not shown signs of suspension. Instead, it has become more and more intense. The fears of power curtailment, production suspension, raw material price increases, and downstream weakness continue to be feared.

Continuous dual control of energy consumption, continuous power limit and production limit

Many netizens reported that although Fujian, Zhejiang and other major chemical provinces have announced the suspension of power rationing, according to feedback from many companies, the situation of power rationing and production limitation still exists when the energy consumption double control test enters the countdown stage. And the intensity is unabated in the past.

Nantong, Jiangsu: Production will be suspended for 10 days in November and 15 days in December. Special personnel will be sent to conduct 24-hour inspections on the operation of the company during the shutdown period.

Kunshan, Jiangsu: Starting from November, production will be shut down during the first three days of the first week of each month, and production will be shut down during the first three days of the third week, and production will be at full capacity during the fourth week.

Taicang, Jiangsu: Orderly electricity consumption has been implemented. In this round of orderly electricity consumption, the first group of the bombing plant will shut down first, and the second group of bombing plant will be turned on first.

Wuxi High-tech Zone (Xinwu District): Implement orderly power-using rotations for industrial enterprises in the zone. The rotation mode is "open three and limit four", and the time period is 07:00-22:00. The 1353 enterprises in the district are divided into two groups, A and B. When the A group is in normal production, the B group is restricted in production. When the B group is in normal production, the A group will be restricted in production.

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At the same time, electricity prices in the 26 provinces across the country have been adjusted to varying degrees, with a rise of up to 80%, which has severely squeezed the profit margins of industrial and manufacturing companies!

In other words, the chemical industry, as a high-energy-consuming industry, faces two major problems. Power-limited companies envy the normal production of those without power-cuts, while companies without power-cuts suffer from the cost pressure caused by rising electricity prices. In the end, neither party was able to sprint performance at the end of the year and redeem the bad effects brought about by many "black swans" this year.

65 cities, environmental protection "stop work order" for 6 months

According to the "Letter of Opinions on the Comprehensive Treatment Plan for Air Pollution in the Autumn and Winter of 2021-2022 in Key Areas (Draft for Solicitation of Comments)" issued by the Ministry of Ecology and Environment, a six-month environmental shutdown order will be launched from the fourth quarter of this year to the end of March next year. ", involving 65 cities in 7 provinces across the country. Recently, the official set the tone again and launched a 67-day enhanced version in a dozen regions including Tangshan, Shijiazhuang, Zhangjiakou, Chengde, Tianjin, Shandong, Jinan, Weihai, Weifang, Shanxi Taiyuan, Datong, Changzhi, Henan Luoyang, Zhengzhou, etc. "Suspension order", which means that more than half of the domestic heavy industry enterprises in provinces, cities and regions are facing the turmoil of production suspension.

The areas covered by the "stop work order" include many major chemical provinces, covering the major production areas of many chemical products in the coal chemical industry chain. Even if it is not involved, chemical companies and some VOC-related processes are unable to operate normally in the context of the national environmental protection situation, the severe environmental protection situation during the heating season, and the release of heavy pollution warnings by 8 provinces and 31 cities. 

Domestic transportation is blocked, foreign trade is difficult to find, and the freight rate is quietly increased

In the notice issued by Tangshan, Hebei on the solicitation of the "Tangshan City 2022 Beijing Winter Olympics and Winter Paralympic Air Quality Assurance Implementation Plan", it is mentioned that the transportation of heavy trucks of National V and below is prohibited, starting from the date of issuance of the plan Until March 13, 2022.

In addition, scattered epidemics have occurred in many places in China, high-risk areas are strictly sealed, factories are shut down, personnel isolation, temporary traffic control, and high-speed closures have frequently occurred, chemical companies cannot produce normally, and transportation has also been hindered. In addition, the previous energy crisis has brought about the increase in oil prices and the rise of liquefied natural gas, which has led to an increase in logistics freight rates.

In terms of foreign trade, due to the overseas epidemic, production capacity has not yet been fully recovered, and terminal operations have also been affected. Containers are difficult to find, rents have soared, ocean freight has risen five times, and spot freight in the Asia-Pacific region has set a new historical record and has increased greatly. The cost of the enterprise.

Profits are upside down, many parties are under pressure, and the longest holiday in history is coming

On the one hand, companies have limited power and production, and cannot produce at full capacity. On the other hand, transportation is blocked, procurement and distribution are restricted, and freight rates are also rising silently, which undoubtedly put pressure on both sides of chemical companies. Even more frightening is that although the golden, nine, and tenth peak seasons have passed, the prices of overseas high-end raw materials have not yet fallen. Japan’s Ishihara, BASF, Mitsui Chemicals, ExxonMobil, Evonik and other overseas giants have also begun to send letters, announcing 12 The issue of price increases in January and even the beginning of 2022 (Related reading: What's the situation? Foreign chemical giants collectively "refuse price reduction"!). Moreover, due to overseas epidemics, geopolitics and other reasons, the freight and surcharges of companies are rising, and delivery cannot be guaranteed or even delayed.