Asian Markets
July 28, 2020
Chinese Crackers
Chinese cracker expansions enter new phase July 28/2020 MOSCOW (MRC) — Four large new crackers are poised to start operations in China in the next 3-6 months, in a sharp expansion of the country’s petrochemical cracker sector, said Argusmadia.
State-controlled Sinochem today said it has commissioned the 3mn t/yr condensate unit at its Quanzhou complex in Fujian province. The key upstream facility produces naphtha for use as a cracker feedstock.
Sinochem conducted successful trial runs at cracker furnaces and a derivative 200,000/500,000 t/yr ethylene oxide/ethylene glycol (EO/EG) plant on 15-16 June.
Quanzhou’s naphtha cracker — Sinochem’s first cracker — was commissioned in December. The unit has 1mn t/yr of ethylene and 500,000 t/yr of propylene capacity.
Sinochem started construction of the cracker and a refinery expansion project at Quanzhou in October 2017. The project has a full stream of petrochemical derivative units, including 100,000 t/yr ethylene vinyl acetate (EVA), 400,000 t/yr high density polyethylene (HDPE), 200,000/450,000 propylene oxide/styrene (PO/SM), 580,000 t/yr polypropylene (PP), 120,000 t/yr butadiene (BD), 100,000 t/yr MTBE, 350,000 t/yr BTX and 800,000 t/yr paraxylene (PX) capacity, as well as the 200,000/500,000 t/yr EO/EG unit.
The refinery expansion includes a residual fluid catalytic cracker (RFCC) with 230,000 t/yr of propylene capacity.
Fellow state-controlled firm Sinopec is also nearing a cracker start-up at its new Zhanjiang complex in Guangdong province. The cracker is likely to come on line in July-August, after Sinopec started operating the new 200,000 b/d Zhanjiang refinery on 16 June. The 40bn yuan ($5.6bn) project also includes an associated ethylene cracker complex.
The naphtha cracker has 800,000 t/yr of ethylene and 430,000 t/yr of propylene capacity and is integrated with 250,000/400,000 t/yr EO/EG, 350,000 t/yr HDPE, 100,000 t/yr EVA and 550,000 t/yr PP derivative units. The refinery also has a RFCC unit with 320,000 t/yr of propylene capacity.
Two private-sector Chinese firms are also making progress on cracker projects.
Refiner Bora Chemical is preparing to start its 1.1mn t/yr ethylene cracker project at Panjin in northeast Liaoning province. The company held successful trial runs at its downstream 450,000 t/yr linear low-density polyethylene (LLDPE) unit on 25 May and is now aiming to feed in the cracker in August-September. The cracker will consume 1.65mn t/yr of naphtha and light products from Bora’s 140,000 b/d Panjin refinery, as well as 1.1mn t/yr of propane and butane that will be bought from the market. The complex has 450,000 t/yr LLDPE, 350,000 t/yr HDPE, 350,000 t/yr SM and 600,000 t/yr PP derivative capacity. Global petrochemical firm LyondellBasell agreed in early March to take a 50pc stake in the project and set up a joint venture, Bora LyondellBasell, which will operate the ethylene cracker and associated polyolefin derivatives complex. The project has a total expected cost of about USD2.6bn.
Private-sector Wanhua Chemical is poised to commission its LPG-fed cracker at Yantai in Shandong province. It plans to start up the cracker around September-October this year.
The cracker, fed by 2.4mn t/yr of propane and butane, can produce 1mn t/yr of ethylene and 500,000 t/yr of propylene. Wanhua started construction work in 2017.
The cracker’s petrochemical derivative facilities include a 350,000 t/yr HDPE unit, 450,000 t/yr LLDPE plant, 300,000/650,000 t/yr PO/SM plant, 150,000 t/yr EO unit, two 320,000 t/yr EDC plants, 300,000 t/yr PP unit and an 80,000 t/yr BD plant.
Wanhua Chemical owns China’s single-largest capacity propane dehydrogenation (PDH) plant at Yantai in Shandong province. The PDH unit has 750,000 t/yr of propylene capacity and fully integrated derivatives units. Wanhua is also the world’s largest methylene diphenyl diisocyanate (MDI) manufacturer.
July 28, 2020
Chinese Crackers
Chinese cracker expansions enter new phase July 28/2020 MOSCOW (MRC) — Four large new crackers are poised to start operations in China in the next 3-6 months, in a sharp expansion of the country’s petrochemical cracker sector, said Argusmadia.
State-controlled Sinochem today said it has commissioned the 3mn t/yr condensate unit at its Quanzhou complex in Fujian province. The key upstream facility produces naphtha for use as a cracker feedstock.
Sinochem conducted successful trial runs at cracker furnaces and a derivative 200,000/500,000 t/yr ethylene oxide/ethylene glycol (EO/EG) plant on 15-16 June.
Quanzhou’s naphtha cracker — Sinochem’s first cracker — was commissioned in December. The unit has 1mn t/yr of ethylene and 500,000 t/yr of propylene capacity.
Sinochem started construction of the cracker and a refinery expansion project at Quanzhou in October 2017. The project has a full stream of petrochemical derivative units, including 100,000 t/yr ethylene vinyl acetate (EVA), 400,000 t/yr high density polyethylene (HDPE), 200,000/450,000 propylene oxide/styrene (PO/SM), 580,000 t/yr polypropylene (PP), 120,000 t/yr butadiene (BD), 100,000 t/yr MTBE, 350,000 t/yr BTX and 800,000 t/yr paraxylene (PX) capacity, as well as the 200,000/500,000 t/yr EO/EG unit.
The refinery expansion includes a residual fluid catalytic cracker (RFCC) with 230,000 t/yr of propylene capacity.
Fellow state-controlled firm Sinopec is also nearing a cracker start-up at its new Zhanjiang complex in Guangdong province. The cracker is likely to come on line in July-August, after Sinopec started operating the new 200,000 b/d Zhanjiang refinery on 16 June. The 40bn yuan ($5.6bn) project also includes an associated ethylene cracker complex.
The naphtha cracker has 800,000 t/yr of ethylene and 430,000 t/yr of propylene capacity and is integrated with 250,000/400,000 t/yr EO/EG, 350,000 t/yr HDPE, 100,000 t/yr EVA and 550,000 t/yr PP derivative units. The refinery also has a RFCC unit with 320,000 t/yr of propylene capacity.
Two private-sector Chinese firms are also making progress on cracker projects.
Refiner Bora Chemical is preparing to start its 1.1mn t/yr ethylene cracker project at Panjin in northeast Liaoning province. The company held successful trial runs at its downstream 450,000 t/yr linear low-density polyethylene (LLDPE) unit on 25 May and is now aiming to feed in the cracker in August-September. The cracker will consume 1.65mn t/yr of naphtha and light products from Bora’s 140,000 b/d Panjin refinery, as well as 1.1mn t/yr of propane and butane that will be bought from the market. The complex has 450,000 t/yr LLDPE, 350,000 t/yr HDPE, 350,000 t/yr SM and 600,000 t/yr PP derivative capacity. Global petrochemical firm LyondellBasell agreed in early March to take a 50pc stake in the project and set up a joint venture, Bora LyondellBasell, which will operate the ethylene cracker and associated polyolefin derivatives complex. The project has a total expected cost of about USD2.6bn.
Private-sector Wanhua Chemical is poised to commission its LPG-fed cracker at Yantai in Shandong province. It plans to start up the cracker around September-October this year.
The cracker, fed by 2.4mn t/yr of propane and butane, can produce 1mn t/yr of ethylene and 500,000 t/yr of propylene. Wanhua started construction work in 2017.
The cracker’s petrochemical derivative facilities include a 350,000 t/yr HDPE unit, 450,000 t/yr LLDPE plant, 300,000/650,000 t/yr PO/SM plant, 150,000 t/yr EO unit, two 320,000 t/yr EDC plants, 300,000 t/yr PP unit and an 80,000 t/yr BD plant.
Wanhua Chemical owns China’s single-largest capacity propane dehydrogenation (PDH) plant at Yantai in Shandong province. The PDH unit has 750,000 t/yr of propylene capacity and fully integrated derivatives units. Wanhua is also the world’s largest methylene diphenyl diisocyanate (MDI) manufacturer.
July 22, 2020
China Wind Power Subsidies
China Boosts Renewable Power Subsidies 7.5% to $13 Billion
(Bloomberg) — China boosted its budget for renewable power subsidies to 92.36 billion yuan ($13 billion), 7.5% more than it spent last year.
Solar power is the big winner, with incentives set to rise 14% compared to last year’s level, while wind payments will be 3.2% lower, the Ministry of Finance said on its website on Wednesday. The subsidy budget would cover existing projects plus any new developments that meet eligibility criteria.
Solar’s allocation was higher than expected, which is “positive for both the photovoltaic equipment value chain as well as solar farm operators,” said Tony Fei, an analyst at BOCI Research Ltd. in Hong Kong. But “wind farm operators might see a slight marginal decline in subsidies for existing projects.”
Solar projects will get 42.84 billion yuan, while wind will get 35.69 billion. The remainder of the budget is for biomass power and funding to local governments for grid companies.
Applications for new solar power projects that will compete for national subsidies rose 36% to 33.5 gigawatts in 2020, the National Renewable Energy Information Management Center said separately. Last year China decided to subsidize 22.8 gigawatts of the 24.6 that were submitted.
Last year China spent 85.92 billion yuan total on renewable subsidies. The payments are financed by a surcharge on electricity bills.
Even with the increased budget, there won’t be enough money to go around, said Robin Xiao, an analyst at CMB International Securities Ltd.
China has subsidized renewable energy for years, which allowed it to add more capacity than anywhere else in the world. Based on the subsidized tariffs it offered, and the amount of power expected to be produced, the total bill for renewable subsidies should be about 200 billion yuan this year, Xiao said.
Most of China’s renewables are developed by state-owned firms, but that gap between subsidies owed and paid has hurt valuations of companies traded publicly outside mainland China. China Datang Corp. Renewable Power Co. and China Longyuan Power Group Corp. trade below their book value in Hong Kong, in part because they are owed so much by the government, according to Xiao.
The government is also trying to reduce the number of new projects that are eligible for subsidies, as it wants them to be able to compete against dominant coal power on price alone. Subsidies for onshore wind will be phased out after this year, with offshore wind following from 2022.
July 22, 2020
China Wind Power Subsidies
China Boosts Renewable Power Subsidies 7.5% to $13 Billion
(Bloomberg) — China boosted its budget for renewable power subsidies to 92.36 billion yuan ($13 billion), 7.5% more than it spent last year.
Solar power is the big winner, with incentives set to rise 14% compared to last year’s level, while wind payments will be 3.2% lower, the Ministry of Finance said on its website on Wednesday. The subsidy budget would cover existing projects plus any new developments that meet eligibility criteria.
Solar’s allocation was higher than expected, which is “positive for both the photovoltaic equipment value chain as well as solar farm operators,” said Tony Fei, an analyst at BOCI Research Ltd. in Hong Kong. But “wind farm operators might see a slight marginal decline in subsidies for existing projects.”
Solar projects will get 42.84 billion yuan, while wind will get 35.69 billion. The remainder of the budget is for biomass power and funding to local governments for grid companies.
Applications for new solar power projects that will compete for national subsidies rose 36% to 33.5 gigawatts in 2020, the National Renewable Energy Information Management Center said separately. Last year China decided to subsidize 22.8 gigawatts of the 24.6 that were submitted.
Last year China spent 85.92 billion yuan total on renewable subsidies. The payments are financed by a surcharge on electricity bills.
Even with the increased budget, there won’t be enough money to go around, said Robin Xiao, an analyst at CMB International Securities Ltd.
China has subsidized renewable energy for years, which allowed it to add more capacity than anywhere else in the world. Based on the subsidized tariffs it offered, and the amount of power expected to be produced, the total bill for renewable subsidies should be about 200 billion yuan this year, Xiao said.
Most of China’s renewables are developed by state-owned firms, but that gap between subsidies owed and paid has hurt valuations of companies traded publicly outside mainland China. China Datang Corp. Renewable Power Co. and China Longyuan Power Group Corp. trade below their book value in Hong Kong, in part because they are owed so much by the government, according to Xiao.
The government is also trying to reduce the number of new projects that are eligible for subsidies, as it wants them to be able to compete against dominant coal power on price alone. Subsidies for onshore wind will be phased out after this year, with offshore wind following from 2022.
July 22, 2020
China Update
INSIGHT: China petrochemical demand stays weak; supply to increase near term
Author: Yvonne Shi
2020/07/22
SINGAPORE (ICIS)–China’s overall petrochemical demand has weakened in July while supply is projected to increase, dimming the market outlook in the near term.
Inventories of major chemicals such as benzene, polyolefins, ethylene glycol, acetone and toluene all posted increases in the week ended 17 July, according to ICIS data.
Softer demand was reflected in spot market prices as tracked by the ICIS China Petrochemical Index. The index fell to 877 on 17 July, down from 898 on 8 July, and lower than the June average of 888.6.
The index tracks movement of domestic prices of a wide array of organic and plastics products, including methanol, purified terephthalic acid (PTA), polypropylene (PP), polyethylene (PE), monoethylene glycol (MEG), mixed xylene, benzene, toluene, acetic acid, styrene, phenol, acrylonitrile, acetone, n-butanol, 2-ethylhexanol (2-EH), acrylic esters and propylene oxide (PO).
END-DEMAND STILL WEAK
Spot petrochemical purchases have slowed down due to a combination of recent price spikes, high stocks and poor end-demand.
For propylene oxide (PO), recent market gains have driven up prices of downstream polyether polyols, whose producers have had to struggle with limited margins due to inability to fully pass on increased costs to end-users.
Downstream sectors, such as automobile, furniture and fabrics, are still in the process of a slow recovery.
Producers of polybutylene terephtalate (PBT) – downstream of butanediol (BDO) – may have to reduce output, with end-users holding sufficient inventories less willing to purchase raw materials at increased prices.
For purified terephthalic acid (PTA), limited exports of downstream clothing and textiles hamper market gains although downstream polyester plants are running at high rates.
PTA inventory among producers and downstream end-users alike has remained high, while the government is trying to help out exporting companies survive by re-directing their products to the domestic market.
Polyolefin downstream manufacturers, meanwhile, are also currently holding large inventories of raw materials and products.
Buying of polypropylene (PP) turned more cautious after recent price gains, while some small downstream factories have halted operations due to high feedstock costs.
Demand for bisphenol-A (BPA) was hit as downstream polycarbonate (PC) producers cut output following heavy losses caused by poor end-demand and high feedstock prices.
Scheduled turnarounds at another major downstream – liquid epoxy resins (LER) – will also further weaken demand for BPA. The LER market, nonetheless, is relatively healthy on the back of government’s subsidy on its downstream wind power industry.
Petrochemical end-users in general are also hesitant to buy as new capacity coming on stream will boost domestic supply in the third quarter.
Read more here: https://www.icis.com/explore/resources/news/2020/07/22/10532442/insight-china-petrochemical-demand-stays-weak-supply-to-increase-near-term
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