PE plant operations under dual control policy

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.

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.

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.