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Insight | Time: Sep 15 2021 2:40PM
PE plant operations under dual control policy
 
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On August 17th, the National Development and Reform Commission issued the "Barometer on the achievement of double control targets of energy consumption in various regions in the first half of 2021". The intensity of energy consumption in many areas did not decrease but increased. As for polyethylene, Northwest China and Jiangsu Province are the more affected regions.

 

In the two regions, plants affected by the dual control policy of total energy consumption and energy intensity have been sorted out, excluding the plants that closed previously and some affected by other factors, The current production capacity affected by the dual control policy is around 1.57 million tons, of which 900kt plants shutdown (BASF-YPC, Satellite petrochemical, and ChinaCoal Mengda) and 670kt are operated with reduced rates (Zhongtian Hechuang and Jiutai Energy). The rest of the plants have not been affected so far.


Plants Production Capacity (kt/year) Operation
Sinopec Yangzi PC (YPC) HDPE/LLDPE 200 Normal operation, running for 2650
HDPE 270 Normal operation, running for 5515T/5305T/5000S
BASF-YPC LDPE 200 closed on Sep 13 due to the dual control policy
Jiangsu Sailboat LDPE/EVA 200 Normal operation, running for EVA
LDPE/EVA 100 Normal operation, running for EVA
Satellite petrochemical HDPE 400 closed on Sep 14 due to the dual control policy
Shenhua Baotou HDPE/LLDPE 300 running for 8007, plans to shut on Sep 15 for maintenance
Shenhua Xinjiang LDPE 300 Normal operation, running for 2426H
Shenhua Yulin LDPE 300 running for 2426H锛宼he operating rate inched down due to the 14th National Games of PRC
Shenhua Ningxia Coal II HDPE/LLDPE 450 Normal operation, running for 7042
Shaanxi Yanchang ChinaCoal HDPE/LLDPE 300 Normal operation, running for 6094
HDPE 300 Normal operation, running for PN049
Shaanxi Yanchang ChinaCoal II LDPE/EVA 300 Normal operation, running for EVA
ChinaCoal Mengda HDPE/LLDPE 300 closed on Sep 14 for around 5days due to the dual control policy
ChinaCoal Shaanxi Yulin HDPE/LLDPE 300 Normal operation, running for 7042
Ningxia Baofeng Energy HDPE/LLDPE 300 Normal operation, running for 7042
Ningxia Baofeng II  HDPE 300 Normal operation, running for 6081H
Zhongtian Hechuang LDPE 370 under the influence of dual control policy, the operating rate reduced to around 50% and running for LD251/LD100PC
LLDPE 300 shut in early Sep
Pucheng Clean Energy HDPE/LLDPE 300 Normal operation, running for 7042
Yan'an Energy & Chemical HDPE 450 shut in early Sep
Jiutai Energy HDPE/LLDPE 300 under the influence of dual control policy, the operating rate reduced to around 70% and running for 7042


In terms of 1.57 million tons, it only accounts for 6.2% of the total PE production capacity, which has little impact on PE for the time being. In the future, new plants being affected by the dual control policy will be updated in CCFGroup website.


Updated on Sep 16


On Sep 15, a widely circulated notice issued by the Yulin Municipal Development and Reform Commission on the target task of dual control of energy consumption in Yulin City in 2021 has once again triggered market concerns. According to the key regulation and control enterprises in September disclosed in the document, most PE plants located in Yulin City are required to reduce production by 50-60%, involving 1.5 million tons of PE production capacity, accounting for less than 6% of the total production capacity.


Plants Production Capacity (kt/year) Operation Note
Shenhua Yulin LDPE 300 running for 2426Hthe operating rate inched down previously due to the 14th National Games of PRC Production cut by 50%, and power supply cut by 50%.
Shaanxi Yanchang ChinaCoal HDPE/LLDPE 300 Normal operation, running for 6094 Production cut by 60%, and power supply cut by 60%.
HDPE 300 Normal operation, running for PN049 Production cut by 60%, and power supply cut by 60%.
Shaanxi Yanchang ChinaCoal II LDPE/EVA 300 Normal operation, running for EVA Production cut by 60%, and power supply cut by 61%.
ChinaCoal Shaanxi Yulin HDPE/LLDPE 300 Normal operation, running for 7042 Production cut by 50%, and power supply cut by 50%.


Currently, most of the plants in Yulin have just received the notice of the document, and some plants have indicated that they have not received the notice temporarily. The specific production reduction measures in the later period are still under discussion, and CCFGroup will continue to follow up on the specific production reduction and suspension measures.


[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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