Multiple Force Majeure Effects, Low Raw Material Inventory In The Chemical Industry

In addition to work stoppages, transportation suspensions, and restricted personnel movement caused by the epidemic, the chemical industry is also facing multiple "tests" towards the end of the year.

The 6-month “stop work order” routinely issued by the Ministry of Ecology and Environment in winter covers 65 provinces, cities and regions in China. That is to say, from October 1 to March 31, 2022, chemical companies in nearly 100 cities in China will face suspension restrictions. This includes Shandong, a major chemical province, Henan, Shaanxi, Shanxi, a major coal chemical province, and Beijing-Tianjin-Hebei and surrounding areas.

In addition, with only less than a week before the end of the year, the strict control of dual energy consumption, power and production restrictions has not been alleviated, and the low operating rate of chemical companies has been going on for a long time. The areas where energy consumption intensity does not decrease but increase passively include Jiangsu, a major chemical city, Yunnan, a major phosphorous chemical industry, Ningxia, a major fluorine industry, and Qinghai and Xinjiang, the major provinces of chlor-alkali chemical industry. Zhejiang, Henan, Jiangsu, Sichuan, Anhui, Heilongjiang and other areas where the "yellow light" is lit are also "everyone at risk." Some areas have implemented up to 90% reductions in production for chemical companies with high energy consumption and high emissions.

In addition, the maintenance plan for major chemical plants at the end of the year is still in operation. Many companies such as Wanhua Chemical, Thorpe Chemical, Hengli Petrochemical, Ningbo Fude, Yisheng Dahua, Sichuan Meifeng and other companies have started or are about to conduct shutdown maintenance. , The longest period is as high as 50 days. These large factories are in the leading position in the industry. Their parking is equivalent to most of the capacity constraints, and it has also sounded the alarm for the industry-chemical inventory will drop sharply.

On the whole, the domestic phosphorus chemical industry, fluorine chemical industry, chlor-alkali chemical industry, coal chemical industry, petrochemical industry, ethylene, oil refining and other chemical industry chains and sub-sectors may see a sharp decline in factory inventory or even "negative inventory." It can also be predicted from the reduction of dye inventory that the inventory and price levels of the chemical products in the above-mentioned force majeure areas are about to change. Will the tight prices of yellow phosphorus, soda ash, phosphoric acid and a variety of products appear as in September? It is closely related to multiple factors such as epidemics, closures, suspension of production, and holidays. The final outcome depends on The result of the market game.