PDH Unit at Tianjin Bohai Chemical Industry Group Took Overhauls

The PDH units at Tianjin Bohai Chemical Industry took overhauls, and it was estimated that the supply volume of propane would increase. Given the substitutive impact on the civil-use LPG from propane, the increment in the propane supply volume may challenge the civil-use LPG market in North China.

After the New Year’s Day, downstream users showed moderate interest in purchasing resources. Besides, supported by the low inventory at sellers and bullish sentiment of buyers, the civil-use LPG prices in North China recovered obviously. Therefore, the overall trading atmosphere resumed to some extent.

As shown from the chart above, state-owned and independent refineries reduced the inventory before the New Year’s Day holiday. The civil-use LPG prices were largely stable, and some sellers cut offers in order to maintain low inventory during the holiday. After the holiday, as downstream users replenished stocks, and the CP January remained stable, the civil-use LPG prices began rising. Downstream users held bullish sentiment towards the civil-use LPG market and were active in purchasing civil-use LPG resources.

The increase of the civil-use LPG prices in North China mainly due to the increment in the demand for civil-use LPG. Moreover, as units at Tianjin Bohai Chemical Industry Group were shut down for maintenance ahead of schedule, the supply of propane increased to some extent. Meanwhile, market participants were active in purchasing imported propane resources, and the demand for fuel gas remained strong in winter. Therefore, the market share of civil-use LPG in North China may be occupied in the near future.

According to SCI, it is just a theoretical expectation that the supply volume of propane will increase due to the overhaul of PDH units at Tianjin Bohai Chemical Industry Group. However, Tianjin Bohai Chemical Industry Group controls the sales volume at present. Meanwhile, SCI learns that the demand for imported propane resources is strongest in Northeast China. Besides, the propane resources in Northeast China are quite insufficient, and the propane supply from Tianjin Bohai Chemical Industry Group is one of the propane source in Northeast China.

On the whole, the increment in the supply volume of propane, due to the PDH unit overhaul at Tianjin Bohai Chemical Industry Group, may challenge the civil-use LPG market in North China, but the impacts may be relatively limited.