Chemical Plants Are Collectively Shut Down! Stocking Started

Recently, the A-share listed company Bohai Chemical issued an announcement saying that the current external epidemic situation has caused the wholly-owned subsidiary Bohai Petrochemical to be unable to maintain economic production, resulting in insufficient product economy. After research, it is decided that the PDH plant of Bohai Petrochemical will be shut down in an orderly manner from March 23, and the shutdown time is expected to be about 15 days, which will have a certain impact on the company's recent operating performance.

Many domestic chemical plants have been shut down, and transportation has been blocked

It is worth noting that the shutdown of Bohai Chemical is not an exception. Recently, a number of chemical companies announced that they would suspend production and operations due to the epidemic. This wave of operations may seem sudden, but in fact, these companies made decisions after synthesizing various influencing factors and weighing various pros and cons, which is similar to the emergency shutdown of more than 20 listed companies at the end of last year. It is also because of the epidemic, the difference is that the current situation is more severe, and the operation and purchase and sales of chemical plants in various places are basically stagnant.

Shenyang Chemical: Affected by the government's epidemic prevention and control requirements, the production and production restrictions of major downstream enterprises, and cross-regional logistics restrictions, the company will temporarily suspend production from March 23, 2022. The first quarter results of the year had a certain impact.

Lubei Chemical: Due to the severe situation of the new crown epidemic in Binzhou recently, in accordance with the requirements of the government epidemic prevention and control headquarters, the personnel and vehicles in the city are controlled and controlled. In addition, affected by the epidemic prevention and control measures in Cangzhou and other surrounding areas, the company's raw and auxiliary materials Supply and product sales are affected. The wholly-owned subsidiary Jinhai Titanium Industry's original 100,000-ton sulfuric acid titanium dioxide production line (the newly put into operation of Jinhai Titanium's 100,000-ton sulfuric acid method titanium dioxide production line is in normal operation), and the ammonium phosphate production unit of its subsidiary Phosphorus Technology Co., Ltd. Temporary suspension of production for maintenance since 21st.

In addition, many chemical companies also announced that due to the impact of the epidemic on transportation, they reminded everyone to arrange stocking in advance. Qingdao Soda Industry said that a large number of foreign vehicles could not arrive at the factory to pick up the goods on time, and the vehicles that went to other places could not arrive due to many areas, which directly affected the normal delivery of the company. Driver delivery is also a lot of resistance.

Force majeure occurs frequently overseas, and major factories such as BASF and Mitsui Chemicals are affected

According to the paint procurement network, not only domestic, but also the recent overseas situation is not optimistic. BASF declared force majeure, Mitsui Chemicals closed its factories, and the supply of various chemicals plummeted.

BASF: The 400,000-ton/year MDI unit at the Geismar plant in North America suffered from an unexpected equipment failure that affected the operation of the plant. From now on, force majeure will take effect on all MDI products and products containing MDI components. BASF is currently carrying out active maintenance on the equipment, and the production interruption is currently forecast to last about three weeks.

Olin, an American epoxy resin manufacturer, has announced that the German factory will stop producing epoxy resin, only because the production cost is too high, and the recovery time will be further notified.

PTA giant Mitsui Chemicals plans to shut down Japan's Iwakuni Otake's purified terephthalic acid (PTA) plant, which has a production capacity of 400,000 tons/year, in August 2023. The main reason is the decline in global market conditions and the reduction in domestic demand in Japan.

In addition, due to two strong earthquakes in Japan, Tokyo Electric Power Company said that more than 2 million customers in the service area were out of power. At present, there are still generator sets out of operation, chemical plants and oil refineries are also affected, and many companies have been forced to close.

Japan's largest refiner ENEOS said its 145,000-bpd Sendai refinery in the northeast and its 129,000-bpd Chiba refinery in Tokyo Bay were closed after the earthquake. Shipments of petroleum products at the Sendai and Chiba refineries have also been fully suspended, and it is unclear when they will resume.

MARUZEN NCC maintains a minimum operation of 500,000 tons/year ethylene and 300,000 tons/year propylene.

Japan's JSR's factory in Qiandao has been affected, and its main products include BD, IPM, and all derivatives S/D.

Ube Maruzen (UbeMaruzen) said that the 12,000-ton LDPE and 50,000-ton LLDPE units will be temporarily shut down completely.

The Chiba plant of Japan's Tosoh Group's Ocean Vinyl Chloride Company was shut down due to an earthquake that caused a power outage.

Japan Petroleum Exploration Co.'s Soma LNG import terminal has ceased operations due to a power outage.

Mitsui Chemicals suspended operations at a plant in Chiba Prefecture.

Sumitomo Rubber Industries' tire plant in Shirakawa City, Fukushima Prefecture has ceased operations.

Shin-Etsu Chemical's PVC plant was affected and the plant was shut down.

The energy crisis intensifies, the opening is a loss, and the "production reduction tide" vicious circle

Throughout the above chemical enterprises to stop work, production, shutdown, etc., the main factors are the spread of the epidemic and force majeure, which can not help but make many domestic midstream coating and chemical enterprises feel anxious. What's more serious is that in addition to the shortage of upstream supply and the continued high price of raw materials, the comprehensive production cost of enterprises is also increasing, and the main influencing factor is the aggravation of the energy crisis.

On Wednesday, Eastern Time, WTI April crude oil futures closed up $5.24, or 4.78%, at $114.93 a barrel. Brent crude oil futures for May ended up $6.12, or 5.30%, at $121.60 a barrel.

Affected by the general environment, many chemical companies were forced to suspend production and production, and some companies chose to take the opportunity to perform maintenance and reduce load operations. The PTA factory has been overhauled more, and the capacity utilization rate has been at a low point during the year. The restart time of Yisheng Ningbo’s 2 million tons of PTA was postponed to be determined, and the two sets of Yisheng New Materials maintained one and a half operation. Fuhai Chuang’s 4.5 million tons dropped to 80% in early March. The 2.5 million tons of Line 4 of Li Petrochemical began to be overhauled on March 10; the 650,000 tons of Yangzi Petrochemical and the 1.25 million tons of PTA units of Zhuhai Ineos were all planned to be overhauled in late March, and the plants of Hengli Petrochemical Line 1 and Jiaxing Petrochemical were scheduled to be overhauled in April. Schedule an overhaul. In the textile industry, weaving factories in Jiangsu and Zhejiang have been reducing production and burden recently, and the comprehensive start-up load of looms is less than 70%.

The agency predicts that before and after the Qingming Festival, the operating rate of some chemical industry segments will drop by another 10%. So when more and more midstream chemical companies choose to actively or passively stop production, can the coatings and chemical industries change their slump and become in short supply in the future? Whether it can ignite the "price surge" again is worth waiting and seeing.