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Sinopec sees sharp drop of polymer supply in July
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Sinopec’s ethylene output reduction in July to ensure refined oil supply in China would lead to production loss of around 95,000tonnes of polyethylene (PE) and 30,000tonnes of polypropylene (PP), a source said on 1 July.
“Several petrochemical majors have specific production slashes scheduled for July, while others have tentative plans to do so,” a company source said, adding that, the production loss includes estimated 37,000tonnes of LDPE, 24,000tonnes of LLDPE, 35,000tonnes of HDPE and 30,000tonnes for PP resin in July.
Shanghai Petrochemical planned to shut down its 150,000 tonne/year number one cracker in July, leading to about 4,000tonnes of LDPE loss, 10,000tonnes of HDPE loss, and 10,000tonnes of PP loss.
Yanshan Petrochemical was heard to cut 20,000tonnes of LDPE and 2,000tonnes of HDPE production while Qilu PC Petrochemical was to reduce 20% of ethylene output, leading to around 7,300tonnes of PE resin loss. Yangzi Petrochemical was estimated to cut 10,000tonnes PE and 10,000tonnes PP. Guangzhou Petrochemical was heard to cut 8,000tonnes LLDPE output.
Meanwhile, Zhongyuan Ethylene shut down its PP and PE unit on 3 June for a 35-day maintenance, but the restart would be delayed due to shortage of feedstock, meaning around 8,2000tonnes of LLDPE loss and 2,500tonnes of PP loss. Maoming Petrochemical would run at 50% operation rate on its new LDPE and HDPE unit In July and at 70% capacity at its for new PP unit, leading to around loss of 11,000tonnes of LDPE, 15,000tonnes of HDPE, and 7,600tonnes of PP.
A market sources said PE and PP losses were around 94,000tonnes and 54,000tonnes respectively in June due to Maoming accident and maintenance cycle, leading a very tight supply and record high level prices. “PE prices increased to CNY15,500-18,100/tonne ($2,259-2,638/tonne) on 10 June from CNY14,050-15,300/tonne ($2,048-2,230/tonne) on 1 June, while PP prices rose to on CNY16,000-17,800/tonne 10 June from CNY14,500-15,300/tonne on 1 June,” the source added.
“Although polymer prices have corrected in the second half of June, prices were still at a high level. The expected tight supply in July would buoy the high price level,” traders said. On 1 July, PE prices were at CNY14,700-16,700, while PP prices were at CNY15,900-16,800/tonne .($1 = CNY6.86)
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