test


Member ID:
Password: 
Stay logged in for 30 days
Forget Your Password?
close

login CCFGroup App

Insight | Time: Sep 16 2021 3:56PM
PP plant operations under dual control policy
 
Text size

Recently, the National Development and Reform Commission, China's top economic planning body, rarely and directly pointed out that the energy consumption intensity of 9 provinces and autonomous regions increased instead of decreasing in the first half of the year compared with the same period last year. In addition, the reduction rate of energy consumption intensity of 10 provinces did not meet the progress requirements. It meant that more than half of the provinces failed to achieve the goal of controlling energy consumption and intensity in the first half of the year. The actions in various localities against the goal of controlling energy consumption and intensity, so-called "Double Control", has begun to arouse general concern in society.

 

In mid-Aug, the National Development and Reform Commission issued a notice entitled "The completion of the double control targets for energy consumption in the first half of 2021 by region" and requested that from the date of issuance of this notice, the energy-saving review of projects with high energy consumption and high emission (except major projects planned and laid out by the China government) will be suspended in 2021 for regions (prefecture-level cities, states and leagues) where energy consumption intensity does not decrease but increases. Within 20 working days after the issuance of this notice, the list of areas that have suspended the energy-saving review of the projects with high energy consumption and high emission will be submitted to the National Development and Reform Commission.


image.png


Note: 1. The data of Tibet has been acquired and it not included in the early warning range. The ranking is based on the reduction rate of energy consumption intensity in each region.

 

2. Red is level 1 warning, indicating that the situation is quite severe and the double control progress target has not been achieved, with gap between the actual value and the target value at more than 10%.Orange is level 2 warning, indicating that the situation is relatively severe and the double control progress target has not been achieved, with gap between the actual value and the target value at lower than 10%. Green is level 3 warning, indicating generally smooth progress.


On Sep 15, affected by the dual control policy, PP futures for Jan, 2022, opens at 8623yuan/mt and fluctuates to close at 9036yuan/mt, up 453 or 5.28% from the previous settlement. The open interest increases 84665 lots to 549508 lots, and the turnover totals 1259743 lots. The main reason should be that 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, which involved polypropylene. Shenhua Yulin, ChinaCoal Shaanxi Yulin, Shaanxi Yanchang ChinaCoal and other plants are on the list.

 

Plants Capacity (kt/year) Note
Shenhua Yulin 300 Production cut by 50%, and power supply cut by 50%.
Shaanxi Yanchang ChinaCoal 600 Production cut by 60%, and power supply cut by 60%.
Shaanxi Yanchang ChinaCoal II 400 Production cut by 60%, and power supply cut by 60%.
ChinaCoal Shaanxi Yulin 300 Production cut by 50%, and power supply cut by 50%.


China is the world's largest coal producing country, based on this, coal-based PP production capacity (including MTO PP) accounts for a large proportion of China domestic PP production capacity. As of August 2020, coal-based PP production capacity (including MTO PP) is about 8.52 million tons, accounting for about 28%, of which the northwest region accounts for 84% of China.

 

Since the beginning of 2021, due to the persistently high prices of coal and methanol, the cost of coal-to-olefin has been rising, and coal enterprises are facing a situation of huge losses. At present, under the background of dual energy control policy, what is the production situation of various coal plants?


Region Enterprises Capacity (kt/year) Operation
East China Ningbo Fund 400 The operating rate of MTO plants reduced to 80%锛孭P in normal operation
Changzhou Fund 300 shut since Jul, 2017
Zhongan Lianhe 350 Normal operation
North China Shandong Shenda 200 Normal operation
Northwest China Qinghai Yanhu 160 Normal operation
Shaanxi Yanchang 600 Normal operation
Shaanxi Yanchang ChinaCoal II 400 Normal operation
Yan'an Energy & Chemical 300 shut on Sep 1, and may restart in mid Oct
Shenhua Ningxia Coal I 1000 Normal operation
Shenhua Ningxia Coal II 600 Normal operation
Shenhua Baotou 300 plans to shut on Sep 15 for maintenance
Shenhua Yulin 300 Normal operation
Shenhua Xinjiang 450 Normal operation
Datang Duolun 460 Closed on Sep 6 due to the dual control policy, and may restart on Sep 30
ChinaCoal Shaanxi Yulin 300 Normal operation
ChinaCoal Mengda 300 Normal operation
Ningxia Baofeng Energy 300 Normal operation
Ningxia Baofeng II 300 Normal operation
Pucheng Clean Energy 400 The operating rate reduced to around 80% 
Zhongtian Hechuang 700 1# tubular process plant running forT03锛 2#gas phase process plant shut on Aug 10
Jiutai Energy 300  The operating rate of MTO plants reduced to 70-80% as coal supply is tight锛孭P in normal operation


According to the CCFGroup's recent market research, at present, only Datang Duolun is definitely affected by dual control policy. Some plants such as Yan'an Energy & Chemical and Shenhua Baotou all scheduled for maintenance. Of other plants, most are running normally, among them, the operating rate of Pucheng Clean Energy reduced to around 80%, and the upstream MTO plants of Ningbo Fund and Jiutai Energy lower their operating rate while PP plants still maintain normal production. On the whole, currently, the dual control policy has little effect on the PP market, and it is more emotional changes.

 

At present, 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.

 

Up to now, Shenhua Baotou shut for maintenance, the planned maintenance of the plant in September has been fully implemented, that is, in the second half of September, if there will be no accident, there will be no new maintenance plant, and the phenomenon of temporary shut and accidental shut will not be ruled out. By Sep 15, the production capacity of China domestic closed plants has reached 4.065 million tons/year.


China PP plants shut for maintenance in Aug
Company Capacity (kt/year) Time
PetroChina Dagang PC 100 long term
PetroChina Liaoyang PC 50 long term
PetroChina Dalian PC 50 long term
Changzhou Fund 300 2017.7.1-/
Sinopec Wuhan PC 105 2021.5.25-/
Sinopec Qilu Petrochemical 70 2021.8.2-2021.9.20
Zhongtian Hechuang #2 350 2021.8.10-2021.9.14
Ningbo Fund 400 2021.8.10-2021.9.10
Oriental Energy II #2 400 2021.8.14-2021.9.12
Sinopec Shijiazhuang Refinery & Chemical 200 2021.8.28-2021.10.26
Fujian Gulei Petrochemical 350 2021.8.29-2021.9.10
Yan'an Energy & Chemical 300 2021.9.1-2021.10.15
Datang Duolun #1 230 2021.9.6-2021.9.29
Datang Duolun #2 230 2021.9.6-2021.9.29
Wanhua Chemical Group   300 2021.9.11-2021.9.30
PetroChina Dalian PC 70 2021.9.12-2021.9.17
Sinopec Tianjin Lianhe  II 200 2021.9.14-2021.9.18
Liaoning Huajin Tongda 60 2021.9.14-/
Shenhua Baotou 300 2021.9.15-2021.10.15
Total 4065


[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.
Related Articles
Polypropylene market daily (Oct 20, 2021)
PP expects to rise after the pullback
DCE PP futures for Jan closes 4.92% lower
PP granule market plunges
DCE PP futures for Jan opens 178 lower
Polypropylene market daily (Oct 19, 2021)
Traders' USD offers for major suppliers' PP
DCE PP futures for Jan closes 0.85% lower
PP granule market declines
DCE PP futures for Jan opens 55 higher
 
Research
Supply-demand pattern and forecast of spandex industry
Post-holiday forecast for polyester value chain
2021/22 global cotton: impetus from supply side has not ...
MEG supply-demand faces changes, how will the market go?
PTA market still in overcapacity ?
How to treat the game of each link in the viscose industry?
 
 

娴欏叕缃戝畨澶33010902000742鍙