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PP plants curtail production due to the high cost

2022-03-24 07:57:04 CCFGroup

On March 8, Sinopec has discussed production optimization and planned to adjust the operating rate of each plants.

Enterprises	Planned production cuts policy
Sinopec Zhenhai (ZRCC)	plan to shut one PP production line after the 300kt/year PP plant #3 produces steadily
Sinopec Shanghai PC	#1 and #2 PP plant cut operating rate
Sinopec Yangzi PC (YPC)	plan to shut ahead of schedule
Sinopec Yanshan PC	plan to shut polymerization plant since Mar 9
Sinopec Qilu Petrochemical	shut its PP plant
Sinopec Tianjin Lianhe	cuts the operating rate of PP plant #1 to 87%, and PP plant #2 to 81%
Sinopec Sabic Tianjin (SSTPC)	operates at 83%, PP reduces production by 9,000 tons
Sinopec-SK (Wuhan) PC	#1 and #3 PP plant operates with low rate, and #2 shut for around 14-15days on May 19
Sinopec Zhongyuan PC	Ethylene Cracker shutdown
Sinopec Maoming PC	2#PP plant shut for 5-6days
Sinopec Guangzhou PC	cuts the operating rate of PP plant
Zhongke (Guangdong) Refining & Chemical	cuts the operating rate of PP plant
Fujian Gulei Petrochemical	operates at 70%
FREP	one production line cut operating rates or close

According to the survey, most enterprises have implemented the plan, but the actual degree of implementation is different from the amount of plan implementation.

Then, PetroChina also plans to reduce production. According to PetroChina, the operating rate of ethylene is reduced from 99.4% to 87.4%. The actual production of polyolefin is reduced by more than 70,000 tons per month, of which PP production is reduced by 23,600 tons.

Enterprises	PP production reduction(tons)	Note
PetroChina Fushun PC	7000	90kt/year PP plant closed
PetroChina Liaoyang PC	3000
PetroChina Lanzhou PC	1100	cut operating rates
PetroChina Dushanzi PC	6500	cut operating rates
PetroChina Sichuan PC	6000	cut operating rates
Total	23600

The above figure shows the planned production reduction, and the actual situation will continue to be tracked by CCFGroup.

With the retreat in international crude oil price as the turning point, the cash flow of oil-based PP and propane dehydrogenation-based PP has improved, while the losses in cash flow of coal-based PP, MTO and Propylene polymerization have increased. However, in any case, the cash flow of each production process is still negative, and the production pressure is relatively heavy.

Therefore, if the loss of PP cash flow persists, more companies will reduce production or increase production reduction in the future.

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