Supply Chain Shock! Chemical Industry Shut Down for 6 Days for Power Cut

In addition to being a major hydropower province, Sichuan is also a major chemical province. Not only does it have a complete range of chemical industries, but it is also the most important natural gas chemical production and R&D base in the country. Huge impact on the industry chain!

After the news of the call was issued, the local photovoltaic industry chain, steel, chemical and other enterprises in Sichuan were affected, and many enterprises pressed the "pause button" for production!

Aluminum industry leader Zhongfu Industry: Part of the production capacity of its subsidiary Guangyuan Linfeng and its shareholding subsidiary Guangyuan Zhongfu will be suspended for a week from August 14. It is expected that the production of electrolytic aluminum of the above two subsidiaries will be reduced by 12,900 tons in total, corresponding to a net profit reduction of about 78 million yuan.

▶Lutianhua, a new agrochemical leader: its production unit in Naxi District, Luzhou will be shut down from August 15th to 20th, and it is expected to reduce the output of urea by 35,000 tons and methanol by 10,000 tons. It is expected that the net profit attributable to shareholders of the listed company will decrease by about 30 million yuan.

▶Chlor-alkali leader Tianyuan Co., Ltd.: Some of the production capacity of subsidiaries in Sichuan will be temporarily suspended for one week from August 15, 2022 to 24:00 on August 20, 2022.

▶All Sichuan electric furnace steel mills have been notified, and 11 electric furnace steel companies have all started to stop production, in response to the policy requirements of making electricity available to the people. The short-process steel mills in Sichuan basically stopped production, and the long-process steel mills also staggered production, with a production stoppage ratio of 71%. The electricity arrangement plan is expected to affect the production of the steel mill in Sichuan for about a week, and the total output is expected to be 210,000 tons.

Sichuan is the concentrated production capacity of industrial chains such as phosphorus chemical industry and energy chemical industry. The local chemical products such as titanium dioxide and fertilizer account for a large proportion of the country. In addition, we can also see from the production capacity ratio chart that this power cut has a certain impact on the supply of raw materials such as butanol, glyphosate, and glufosinate-ammonium.

The actual shutdown time of many enterprises in this power-down is actually longer than the 6 days notified. The production shutdown also means that the risk of raw material supply interruption has increased, and the reduction in output has also caused direct profit loss to the enterprise. production and operation will also be affected.