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Insight | Time: Sep 11 2020 3:47PM
New start-ups may bring some changes to China PP market
 
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Entering September, the turnaround season has basically ended. Except for some long-term shutdown plants, only Sinopec Zhongyuan PC and PetroChina Jinxi PC are still in maintenance. Most plants are now operating normally, and the overall supply returns to a relatively high level. At this time, new plants are putting into production gradually.

In September, up to now, there are mainly four new start-ups, namely, 550kt/year Zhongke (Guangdong) Refining & Chemical Co., Ltd., 350kt/year Sinochem Quanzhou II, 600kt/year Liaoning Bora Enterprise Group (Bora) and 350kt/year Wanhua Chemical Group Co.,Ltd.

Region Sources Company Capacity Note
Northeast China oil-based Liaoning Bora Enterprise Group (Bora) 200 plans to produce on-Spec product
400 plans to produce on-Spec product
Southern china oil-based Zhongke (Guangdong) Refining & Chemical Co., Ltd. 350 producing T03, and has started commercial sale
200 plans to put into production on Sep 11
oil-based Sinochem Quanzhou II 350 test run
North China PDH Wanhua Chemical Group Co.,Ltd. 300 plans to put into production on late Sep

The 350kt/year PP plant #1 of Zhongke (Guangdong) Refining & Chemical Co., Ltd. is now producing T03, and the 200kt/year PP plant #2 of Zhongke (Guangdong) Refining & Chemical Co., Ltd. plans to put into production on Sep 11. The 200kt/year PP plant #1 and 400kt/year PP plant #2 of Liaoning Bora Enterprise Group (Bora) plans to produce on-Spec product this week. In addition, the 350kt/year of Sinochem Quanzhou II tests run successfully. The 300kt/year PP plant of Wanhua Chemical Group Co.,Ltd. plans to put into production on late Sep.



From a regional point of view, the production capacity growth is mainly concentrated in Southern China, Northeast China and North China, with growth rates of 21.23%, 20.55% and 11.24%, respectively. In terms of consumption, South China and North China bear the brunt and are under greater pressure.

First, let’s talk about the Southern China. The PP plants of Zhongke (Guangdong) Refining & Chemical Co., Ltd. and Sinochem Quanzhou II would be put into production locally, and the supply of goods would also been digested locally. The overall market supply will increase significantly, while the growth of demand is limited. The regional competition will be more intense.

Then, let’s talk about the North China. At present, the growth of production capacity in North China is only 11.24%. However, North China is one of the main consumption areas and there are many supply of goods from other areas, especially in the Northwest and Northeast. With the production of the Liaoning Bora Enterprise Group (Bora), most of its supply is expected to transport to North China, aggravating the supply pressure in North China.
[RISK DISCLAIMER] All opinions, news, analysis, prices or other information contained on this report is provided by analyst of Zhejiang Huarui Information Consulting Co., Ltd (CCFGroup) as general market commentary and does not constitute investment advice. CCFGroup will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.
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