The 'Discontinuation Tide' Is Here! More than 100 Chemical Companies have Stopped Production!

Recently, the number of domestic polypropylene PP plant maintenance has continued to increase. Up to now, a total of 50 manufacturing lines have been involved in parking maintenance, and the affected production capacity is as high as 11.57 million tons per year. In August, the domestic polypropylene plant maintenance loss was 559,900 tons, reaching the highest monthly maintenance loss in history, with a month-on-month increase of 34.95% and a year-on-year increase of 65.50%. Such a scale exceeded the expectations of most market participants.

Maintenance is mainly concentrated in East China, Northwest China and Northeast China, accounting for 36%, 21% and 20% respectively. In East China, Donghua Ningbo Phase I and Phase II are scheduled for maintenance, and it is estimated to drive in September; Northwest Shenhua Xinjiang plans to park within the month, and plans to use the car in September; Northeast China Haiguolongyou two lines and Fushun Petrochemical are still parked , The starting time is to be determined... In general, the number of maintenance devices in domestic polypropylene production companies increased during the month, and the maintenance time of some devices was longer, so the loss of maintenance in August increased compared with the previous month.


Large-scale overhaul of more than 100 chemical plants, affecting 15 million tons of production capacity

In fact, not only PP, but also chemicals such as methanol, hydrogen peroxide, and urea have undergone large-scale overhauls recently, covering nearly 100 chemical companies, affecting more than 15 million tons of production capacity, and the parking market ranging from one week to 50 days. Some companies have yet to announce when they will resume production.

Urea:
Due to the continued high temperature, Sichuan Jiuyuan and other urea plants started to stop on August 13th, and Sichuan Lutianhua and Tianhua plants began to stop all the way in the early morning of August 15th. Up to now, almost all urea plants in Sichuan and Chongqing have stopped all the way. , There are 17 parking and reduction enterprises in total, with a daily output of 139,900 tons of urea, a decrease of 11,800 tons compared with the same period last year; the operating rate is 62.67%, a decrease of 7.67% compared with 70.34% in the same period last year.

PE:
In August, a company in Northeast China, Lanhua Yulin, was added to the domestic equipment involved in the production of polyethylene pipe materials, and the annual production capacity involved in the maintenance was 800,000 tons. The parking device involves 16 sets of polyethylene devices, such as Shanghai Petrochemical, Maoming Petrochemical, Yulin Chemical, Daqing Petrochemical and so on.

PVC industry:
This month, Salt Lake Magnesium, Henan Shenma, Hengyang Kingboard, Xinjiang Zhongtai, and Ningbo Formosa Plastics are undergoing maintenance or are about to start maintenance, involving a production capacity of over 4 million tons.

BDO:
Henan Kaixiang overhauled for a month on August 10, Sichuan Tianhua stopped for maintenance on August 15, Shaanxi Chemical replaced the catalyst on August 20, Lanshan Tunhe annual inspection on August 23, Shaanxi Black Cat was overhauled on August 31 One month, Yanchang Petroleum will be overhauled for one month on September 1, Yizheng Dalian will be overhauled on September 1, and some units will maintain 6-70% load operation.

acetone:
The current plant of Bluestar Harbin Petrochemical's 150,000-ton/year phenol and ketone plant was shut down for maintenance at the beginning of the month, and it is expected to be shut down for maintenance for about 50 days.

Bisphenol A:
Yanhua Polycarbonate's 150,000-ton/year bisphenol A plant will be shut down for maintenance, which is expected to take about a month.

Sinopec Mitsui's 120,000-ton/year bisphenol A plant will be shut down for maintenance, which is expected to take about a month.

PTA:
As of August 26, the operating rate of PTA was 68.2%. The preliminary plan for a 2 million-ton PTA plant in South China dropped to 70% in early September, and a 640,000-ton PTA plant in East China was scheduled to be shut down for maintenance in early September, and the maintenance is expected to take 20 days. Nearby, it is expected that the PTA start-up load will continue to be significantly limited. Chuanneng Chemical’s PTA plant with an annual output of 1 million tons was shut down on the evening of August 16, and the restart time is to be determined.

Methanol:
The utilization rate of methanol production capacity in Southwest China was 53.43%, down from -14.02% last week. At present, this part of the methanol plant has been shut down for maintenance from August 13th to August 16th, and the maintenance time is estimated to be about a week.

Yellow phosphorus:
Beginning in the second half of the month, electricity will be cut off in Sichuan, and yellow phosphorus enterprises will be parked. Due to the impact of the epidemic, the Weng'an area of Guizhou has restricted the transportation of yellow phosphorus in some areas, which is more troublesome than before. Some companies in Yunnan have overhauled and suspended quotations.

acetic acid:
Some factories in the acetic acid market were shut down for maintenance, and the supply in the field decreased.

Caprolactam:
Zhejiang Juhua's caprolactam production capacity is 100,000 tons, and it will be shut down for maintenance for about half a month from August 18.

The total production capacity of caprolactam of Haili Chemical Group is 400,000 tons; Shandong Haili is 200,000 tons, and the plant is in shutdown.

Jiangsu Dafeng has 200,000 tons. One line has been shut down for maintenance since April 1 due to power plant maintenance, and the restart has been delayed, and the other line is being stopped.

PDH:
This year, PDH's profit has been losing money, and PDH's construction has also been at a low level over the same period of the past year. In August, PDH's profit was still at a loss, and the start of construction continued to remain low. In August, Donghua Energy's Ningbo 800,000-ton unit and Jinneng Technology and other PDH units were added for overhaul.


Longer, more, more loss! The maintenance season is "big difference", and the peak season is cold...

In the past, August was usually the end of the maintenance season, and then we had to meet the traditional peak season demand of "Golden Nine Silver Ten". That is to say, the hot and rainy August is not suitable for large-scale maintenance of industrial products, and the maintenance that went earlier and later this year obviously lasted for a longer period, and the maintenance of chemical products from March to August Losses are concentrated, all at high levels over the same period of the past year.

For example, in the PP industry, the maintenance loss from March to August was as high as 2.458 million tons, an increase of 1.05 million tons from last year, and the average monthly maintenance loss reached 410,000 tons; the PE industry’s maintenance loss from March to August was 2.215 million tons, an increase of 1.11 million tons from last year. The average monthly maintenance loss is 370,000 tons.

At the same time, due to factors such as the spread of the epidemic, the escalation of the conflict between Russia and Ukraine, the shock of international crude oil, the intensification of the energy crisis, and the rise of global inflation, most chemical companies have fallen into the abyss of losses since the beginning of the year, so they began to actively reduce production and lay flat. With the gradual weakening of crude oil prices in the middle of the year, the profits of various chemical products have deteriorated to varying degrees, and many units have been losing money continuously. The loss per ton of oil-based PP is as high as 2,000 CNY/ton, and the profit is at a historically low level. A series of operations such as production reduction, maintenance, and lower operating rates have been carried out in one go.

For the chemical market, the relationship between supply and demand is an important factor affecting prices. The reduction in the supply side will lead to tighter prices and higher prices. However, in terms of this year's situation, the downstream situation is not optimistic, and domestic sales continue to be sluggish, and foreign trade is almost stagnant. The shutdown of downstream manufacturing factories has even evolved from a few days or weeks to a three-month, half-year holiday. This kind of downstream collective "death" also determines that the upstream chemical companies in the industrial chain will not be very profitable, and even fall into the trap of "thickening without increasing profits". There are also more downstream maintenance than upstream, and once again forced the upstream to reduce production or even maintenance.

So, will this large-scale and long-term production reduction bring about the routine "tightening of goods and prices" and the hot trend of downstream panic buying, or will it become more and more subjective in the downstream holiday wave, and the double squeeze of strong cost and weak demand How the next chemical industry will develop will be dominated by the results of the next round of supply and demand games.