Power Rationing Pre Notice! Jiangsu And Zhejiang Plastic Chemical Enterprises: Copy That!

Jul 21, 2023

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Some plasticizing enterprises in Jiangsu and Zhejiang Province have received the pre notice of power rationing one after another. Will it lead to a “tide of production reduction”?

The unexpected shutdown of the unit occurred frequently, the downstream demand support became stronger, and propylene stopped falling and rose;

The plastic market finished in a narrow range, PP and PE rose slightly, and ABS continued to fall.

Jiangsu and Zhejiang received the notice of power rationing, and the “tide of production reduction” is coming?

In response to the “big roast”, the “power rationing” in China this year came. It is reported that affected by the high temperature, some power control implementation plan notices have also appeared in Jiangsu and Zhejiang recently. In some areas, the high-energy texturing and printing and dyeing enterprises did receive some advance notice of power rationing, but when and how to limit power must be notified, and most of them have not yet started.

Jiangsu and Zhejiang have always been the main chemical production bases in China, where almost all the domestic industrial chains are gathered.

The reporter learned that the chemical enterprises affected by power rationing in Jiangsu and Zhejiang mainly focus on the PTA, ethylene glycol and polyester industry chain, and the impact on the polyester industry chain may first be reflected in the terminal link. The data showed that the texturing, weaving and printing and dyeing loads of Jiangsu and Zhejiang decreased slightly by 1-2 percentage points to 80%, 71% and 73% respectively last week.

However, due to the early occurrence of high-temperature weather this year, the disturbance of power rationing factors in the later period will continue to increase, and the scope of influence will also expand. However, compared with previous years, the implementation intensity and time of power rationing may be reduced. On the one hand, in recent years, China’s power infrastructure has accelerated, and the power supply security has been enhanced; On the other hand, foreign demand has shrunk this year, and downstream weaving enterprises are mostly in the state of unsaturated production, with low production enthusiasm and limited demand for upstream polyester products.

If it is only the power restriction factor, the reduction of polyester industry chain is not strong, but recently, the upstream raw materials continue to rise, the textile end products are difficult to rise, and the profits of the industry chain are gradually compressed. At the same time, after the rise of raw materials, the enthusiasm of downstream speculative stock has also been reduced accordingly. In the future, the reduction of production caused by the increase of downstream inventory and loss pressure may resonate with the power rationing policy.

According to wuzhiqiao, head of the green Dahua futures chemical group, as of July 14, the start-up of urea, a coal chemical product, fell to 77.1% this week, down 4.8% from the same period last month, and has fallen for four consecutive weeks, up 7.1% from the same period last year. Methanol start-up rose to 74.7% this week, down 1.3% from the same period last month and 1.2% from the same period last year. The decline in the start-up of coal chemical industry is related to the continuous high temperature weather in the recent production area and the frequent occurrence of plant failures. In addition, due to the problems of safe production, some chemical plants generally choose to be overhauled from July to August every year in summer.

“From the experience of previous years, the phenomenon of power rationing in some parts of the country has occurred from time to time, but the impact is relatively limited.” wuzhiqiao said that carbide, caustic soda and other industries with large power consumption in the chemical industry are mainly distributed in the northwest region. At present, power rationing is only limited to Zhejiang, Sichuan and other regions. In the future, we will continue to pay attention to the continuous high temperature weather in the country and the national coal supply.

It should be noted that some chemical terminal products enterprises in Jiangsu and Zhejiang are facing the impact of power rationing or greater. “We need to pay attention to the implementation of its orders and local policies, and the stabilization and rebound of raw material prices combined with the recovery of macro risk appetite.” wuzhiqiao said.