China PP Capacity Release Extensive in Jul 2023
Preface: In June, China’s domestic polypropylene (PP) units were still in a relatively centralized maintenance period, which cushioned the supply pressure caused by output growth. On the whole, the supply pressure was not very prominent in the PP market, but it is supposed to increase with newly established capacity and restart of previously overhauled units.
It is predicted that the PP unit operating rate will be around 75.41% in June, down 2.28 percentage points M-O-M. China’s PP output is estimated to be around 2,562.5kt, down 1.31% M-O-M but up 6.31% Y-O-Y. PP output is assessed to be 15,434.8kt from January to June 2023, which rose by 4.20% Y-O-Y.
China PP Unit Maintenance
Remarks: RS = restart, SD = shutdown
Methodology: The output loss above refers to the affected output due to maintenance at producers during the week with a sample coverage rate of 100%. It is calculated via multiplying daily output by maintenance days.
In June 2023, the PP output loss caused by maintenance is predicted to be around 524.9kt, up 3.14% from 508.9kt in May. The turnarounds of PP units are relatively concentrated at present, and producers are willing to cut back operating rates initiatively. It is predicted that unit turnarounds will become limited in July. It is heard that only Oriental Energy Maoming Petrochemical and Yan’an Energy & Chemical planned to arrange maintenance in July. Thus, the effect of unit maintenance is likely to soften a lot, and PP supply may mount up accordingly.
Jan-Jul 2023 China’s PP Granule Capacity Expansion Schedule
In terms of capacity expansion, the double lines at Dongguan Juzhengyuan Technology Phase II were put into use in June, and their output began to be included in SCI’s PP output statistics. The commissioning of 400kt/a PP unit at Oriental Energy New Material (Maoming project) was postponed to July. Additionally, Sinopec Anqing Petrochemical had a trial run recently. Shandong Chambroad Petrochemicals 2# line and Anhui Tianda Petrochemical planned to come on stream in July. There is a possibility for the startup of the new unit at Ningxia Baofeng Energy to be delayed. The supply pressure brought by capacity release is worth paying attention to in the future.
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