Compared with high international propane prices, China's propylene prices stay at a relatively low level, and high cost pressure intensifies the production loss. Given negative production profit and unit malfunction, PDH units saw more operation changes in October, and its capacity utilization fell to 58.37% at the month-end, reaching the lowest level since March.
Source: OilChem
Concerning northern China, PDH-based propylene supply waned obviously in October. Only Shandong Wonfull Petrochemical resumed production, Zibo Xintai Petrochemical, Shandong Binhua New Material and Liaoning Kingfa Technology undertook long-term maintenance, while Tianjin Bohua Petrochemical and Hebei Haiwei Petrochemical undertook temporary maintenance in late October.
Regarding southern China, PDH unit operation changes resulted in decreasing market circulations and new outsourcing demand. The long-term maintenance of Zhejiang Huahong New Materials Phase II and the maintenance of Sierbang Petrochemical dampened market supply, and the shutdown of Zhejiang Shaoxing Sanyuan Petrochemical and Guangxi Huayi Energy Chemical PDH units brought about the demand for outsourcing.
Source: OilChem
However, influenced by the sluggish market, the demand for feedstock outsourcing from major downstream users, such as PP and acrylic acid producers, waned obviously, and they also generally reduced their production loads and shut down their units for maintenance, dragging down the propylene market. Under such circumstances, though PDH-based propylene supply shrank in the market, the propylene market still tended down, and the influence of PDH unit operation changes weakened on China's propylene market in October.
As for November, two PDH units, with the total capacity of 1.2 million tonnes/year, might be put into production or be raised production load, which might slightly push up the overall propylene market supply by roughly 2,000-2,300 tonnes. However, considering constantly rising international propane prices, related producers might postpone their production resumption, and high feedstock prices might bring about rising shutdown possibility, so China's propylene supply is estimated to inch down to 4 million tonnes or so in November, amid sluggish terminal demand.
Written by Ariel Guo, gq@oilchem.net
Edited by Navy Liu, liuchuanjun@mysteel.com
