Concentrated Maintenance in May Buoys PP Market
Preamble: In China, units’ maintenance has increased gradually since late March 2022, and that was concentrated in April, alleviating the supply pressure. In May, maintenance remained intensive, reflecting that deficient supply buoyed PP prices.
According to SCI’s monitoring, PP units have been undergoing more and more maintenance since mid-March, and the output loss caused by maintenance reached a yearly high at 395.4kt in April, up 9.81% M-O-M. Therefore, PP supply grew at a slow rate because of concentrated maintenance and operating rate cut in April, where daily output was lower than that in March. SCI reckons that PP supply will not increase a lot in May because some units will still undergo intensive maintenance or run at reduced operating rates.
China PP Unit Maintenance Review
Most of the stopped units are expected to resume production after mid-May, and standard materials will be produced. PP output is projected to increase after operating rates rally, and the impact on PP market will emerge in late May. Zhejiang Petroleum & Chemical first line, PetroChina Daqing Refining & Petrochemical new line and Sinopec Maoming Petrochemical first line took an overhaul in H2 April, which would not be restarted until end-May or early June. In terms of product category, PP copolymer (low MFR) and pile materials were affected notably by maintenance. EPS30R products of PetroChina Daqing Refining & Petrochemical are mainly supplied to South China and partly to East China. First line of Sinopec Maoming Petrochemical mainly produces EPS30R and EPC30R. If the line is closed, supply of PP copolymer (low MFR) in South China will be affected.
May 2022 China Newly Added PP Unit Maintenance
There will be limited newly added maintenance in May. In mid-May, the second line of Zhejiang Petroleum & Chemical Phase I and units of Oriental Energy (Zhangjiagang) New Material will probably begin to undergo maintenance. Taking maintenance at Zhejiang Petroleum & Chemical Phase II into account, around 1,300kt/a units will remain in downtime in East China, which will ease the regional supply pressure.
Generally, PP industry is under maintenance season in May, which will bring supply decreases. That is beneficial to balance supply and demand. Various companies possess various grades and have different effects on supply structure in different regions.
All information provided by SCI is for reference only, which shall not be reproduced without permission.
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