Government Regulation
February 15, 2022
Wood Structural Panel Primer
Look for quality mark on wood structural panels
By Larry Adams February 14, 2022 | 9:55 am CST
TACOMA, Wash. — When ordering or specifying wood structural panels, it is important to receive the right panel for the application, and equally important that the panel is manufactured with the required quality, according to the APA – The Engineered Wood Association.
Wood structural panels trademarked by APA meet both criteria, based on qualification tests in compliance with Product Standards PS 1 for plywood and PS 2 for plywood and oriented strand board (OSB), as well as on-going quality assurance tests on every production period with a robust quality assurance system. In Canada, APA panels are trademarked to similar standards, which include CSA O121 for Douglas fir plywood, CSA O151 for Canadian softwood plywood and CSA O325 for OSB and plywood.
APA’s Quality Assurance System
APA’s quality assurance system includes review of mill quality procedures, independent third-party audits of the mill quality program and regular independent testing that verifies the quality and performance of wood structural panels. Also, APA’s quality assurance system has proactive steps to ensure any product quality issues are addressed promptly and properly in the manufacturing plant.
APA-certified products are authorized to bear a trademark clearly identifying the appropriate standard and product application. The qualification and quality assurance system apply evaluation methods that are appropriate for many end-use applications, including span ratings for roof, wall and floor construction, and for a wide variety of other uses, such as in concrete forming, upholstered furniture frames, recreational vehicles and other manufactured products where materials with high strength-to-weight ratios, durable exterior adhesives and known mechanical properties are important.
Occasionally, imported wood structural panels are sold in North America. Those imported panels may be manufactured with foreign wood species of a low density or with adhesives of unknown durability, or they may be qualified by testing to a foreign standard that is not developed and intended for North American markets. Furthermore, the in-plant quality program, and especially the independent third-party quality assurance system of imported panels might be untested and unproven in North America.
In the past, APA has been asked to evaluate imported panels available in local markets by testing them with requirements specified in PS 1 and PS 2. In some cases, the panels were found to be lacking in stiffness and bond quality and emitting formaldehyde in excess of certified products conforming to North American standards.
Formaldehyde regulations and structural wood products
Since North American structural wood products produced under the PS 1 and PS 2 standards are designed for construction applications governed by building codes, they are manufactured only with moisture-resistant adhesives that meet Exterior or Exposure 1 bond classifications.
These adhesives, such as phenol formaldehyde and diphenylmethane diisocyanate (MDI), are chemically reacted into stable bonds during pressing. The final products have such low formaldehyde emission levels that they easily meet or are exempt from the world’s leading formaldehyde emission standards and regulations.
Learn more about formaldehyde emission standards and regulations for structural wood products. Specifying APA-trademarked panels manufactured by trusted North American manufacturers is an assurance of getting the right product for the right application at a recognized quality level.
For more information, visit https://www.apawood.org.
https://www.woodworkingnetwork.com/news/look-quality-mark-wood-structural-panels
January 20, 2022
Chinese Olympics Shutdown Update
Burst! Nearly 10,000 Chemical Plants Shut Down! “Suspension” Comes Anytime!
ECHEMI 2022-01-20
Recently, the Ministry of Industry and Information Technology announced that in order to ensure the safe and smooth holding of the Beijing 2022 Winter Olympics and Winter Paralympics, maintain the order of radio waves in venues and special control areas, and ensure the normal use of various types of radio equipment used for event business, the decision was made. During the Beijing 2022 Winter Olympics and Winter Paralympics, radio control will be implemented in parts of Beijing and Hebei Province. It is also clarified that those who violate the provisions of this notice shall be handled by the radio management agency in accordance with the relevant provisions of the state and this city; if a crime is constituted, it shall be transferred to the judicial organ for criminal responsibility according to law.
In addition to the regulation of radio, other industries have recently expressed that they have received “control notices”. A chemical company in Shandong responded that it received an oral notice from a superior to stop production from January 30 to February 20 and from March 4 to March 13 this year. The paint procurement network has communicated and verified with many chemical companies and found that this is not an isolated case. Many chemical companies in Hebei, Henan and other regions said that they have been notified that they are about to stop production.
The reasons for the shutdown of production are basically the same for all companies. Winter is the heating season, and it is prone to frequent heavy pollution. Therefore, the situation of staggered peak shutdown and production restrictions persists. In addition, some companies said that companies with boilers must stop production, which is equivalent to “seal” for chemical companies.
Chemical companies are no strangers to production suspensions and production restrictions. In 2021, chemical companies have experienced shutdowns due to the epidemic, dual control of energy consumption and production restrictions, environmental protection shutdown orders during the heating season, and multiple rounds of emergency response in heavily polluted weather. Production is discontinued. I finally got through 2021 and ushered in 2022. I didn’t expect to encounter many obstacles in the beginning of the year. The overseas epidemic has invaded, and the delivery of high-end imported raw materials has been delayed. Due to the epidemic, many places in China have closed high-speed entrances and exits, temporary traffic control, and enterprises have stopped work and production. Some chemical companies were planning to close the holiday early, but they did not expect to receive a notice before the holiday, and arranged to stop work for two months after the year, which made many chemical workers lament.
Tens of thousands of chemical companies may be affected, and a variety of chemical products are facing “out of stock”!
Once production is stopped and restricted, the inventory in the market will definitely be affected. So, what chemical products will be affected by the suspension of production and production in the above major chemical provinces? According to incomplete statistics from the Paint Purchasing Network, Shandong, Henan, and Hebei are all important chemical towns, and there are many industrial chains of chemical products.
Shandong: There are more than 7,700 chemical enterprises, and the output of many chemical sectors ranks first in the country
Shandong is a major chemical province, and the total chemical economy has ranked first in the country for 28 consecutive years. The chemical products of national key statistics are all distributed, forming the “seven major sectors” industrial system of refining, chemical fertilizer, inorganic chemical, organic chemical, rubber processing, fine chemical, and synthetic materials, and the output of key chemical products ranks in the forefront of the country. At present, there are 84 chemical parks in Shandong, with more than 7,700 chemical enterprises.
From the perspective of supply, the output of chemical products in Shandong Province accounts for a high proportion of the country, and it is concentrated in traditional industries such as chlor-alkali, plastics, and fertilizers. The output of crude oil processing, tires, fertilizers, pesticides, caustic soda and other products ranks among the top in the country. From the perspective of industrial classification, Shandong’s oil refining (including refining and chemical integrated enterprises) and chemical (including petrochemical, coal chemical, salt chemical, tire, new materials, fine chemical) enterprises have relatively large production capacity.
Local companies include Sinopec, Wanhua Chemical, Hengli Petrochemical, Rongsheng Petrochemical, Enjie, Baofeng Energy, China Jushi, Hualu Hengsheng, Tinci Materials, Dongming Petrochemical, Lihuayi, Haike Group, Jingbo Group, Qilu Petrochemical, Luxi Chemical, Lubei Chemical, Shida Shenghua, Qixiang Tengda.
Henan: more than 2,000 well-known chemical companies, including petrochemical and coking industry chains
Henan Province includes 47 chemical industry parks (including chemical industry agglomeration areas, chemical industry characteristic industrial parks, professional chemical industry parks, etc.) and more than 2,000 well-known chemical enterprises. Mainly in petrochemical, coking-based. Henan Province proposes to build a nationally important 500 billion-level modern industrial cluster by 2025. Cultivate industrial chains of hundreds of billions of dollars such as modern coal chemical industry and high-end petrochemical industry, develop characteristic industrial chains such as chlor-alkali chemical industry, fluorine chemical industry, functional materials, etc., accelerate the transformation of traditional chemical industry to fine chemical industry, and improve the intrinsic safety and green level of the chemical industry.
Well-known chemical companies in Henan include Longbai Group, Shenma Co., Ltd., Polyfluoride, Ruifeng New Materials, Xinxiang Chemical Fiber, Henan Energy Chemical Group Co., Ltd., Haohua Yuhang Chemical Co., Ltd., etc.
Hebei: more than 2,200 well-known chemical companies, with a wide distribution of salt chemical and fine chemical industry chains.
Hebei Province is an important chemical base in China. The top 500 chemical companies account for about 8% of the country’s total, second only to Shandong Province and Jiangsu Province. Including 19 chemical parks and more than 2,200 well-known chemical companies.
Hebei Province has formed an industrial system focusing on oil and gas exploration, oil refining, coal chemical industry, salt chemical industry and fine chemical industry. The output of caustic soda accounts for about 4% of the national output, and the output of soda ash accounts for more than 12% of the national output. Well-known chemical companies include Sanyou Chemical, Longxing Chemical, Jizhong Energy, Cangzhou Dahua, Jianxin Co., Ltd. and Kailuan Co., Ltd.
It is not difficult to see that there are more than 10,000 well-known chemical companies in the above regions, covering Wanhua Chemical, Hengli Petrochemical, Luxi Chemical, Shida Shenghua, Qixiang Tengda, Longbai Group, Shenma, Dofluoroduo, Sanyou Chemical, Cangzhou Dahua and many other well-known chemical companies. Although the local listed chemical companies have not yet issued an announcement on the suspension of production and production, the “all factories shut down” and “all those with boilers” mentioned by local companies have obviously brought anxiety to many companies.
As the Spring Festival is approaching, more and more companies are beginning to take holidays, but no one can say with certainty when they can resume work after the festival, or when they will resume production at full capacity. That is to say, large factories in these areas will face the dilemma of shutting down production, and the market inventory of chemical products in the coal chemical, petrochemical, coking refining and fine chemical industry chains will all have the risk of sharp decline. A wave of out-of-stocks.
January 20, 2022
Chinese Olympics Shutdown Update
Burst! Nearly 10,000 Chemical Plants Shut Down! “Suspension” Comes Anytime!
ECHEMI 2022-01-20
Recently, the Ministry of Industry and Information Technology announced that in order to ensure the safe and smooth holding of the Beijing 2022 Winter Olympics and Winter Paralympics, maintain the order of radio waves in venues and special control areas, and ensure the normal use of various types of radio equipment used for event business, the decision was made. During the Beijing 2022 Winter Olympics and Winter Paralympics, radio control will be implemented in parts of Beijing and Hebei Province. It is also clarified that those who violate the provisions of this notice shall be handled by the radio management agency in accordance with the relevant provisions of the state and this city; if a crime is constituted, it shall be transferred to the judicial organ for criminal responsibility according to law.
In addition to the regulation of radio, other industries have recently expressed that they have received “control notices”. A chemical company in Shandong responded that it received an oral notice from a superior to stop production from January 30 to February 20 and from March 4 to March 13 this year. The paint procurement network has communicated and verified with many chemical companies and found that this is not an isolated case. Many chemical companies in Hebei, Henan and other regions said that they have been notified that they are about to stop production.
The reasons for the shutdown of production are basically the same for all companies. Winter is the heating season, and it is prone to frequent heavy pollution. Therefore, the situation of staggered peak shutdown and production restrictions persists. In addition, some companies said that companies with boilers must stop production, which is equivalent to “seal” for chemical companies.
Chemical companies are no strangers to production suspensions and production restrictions. In 2021, chemical companies have experienced shutdowns due to the epidemic, dual control of energy consumption and production restrictions, environmental protection shutdown orders during the heating season, and multiple rounds of emergency response in heavily polluted weather. Production is discontinued. I finally got through 2021 and ushered in 2022. I didn’t expect to encounter many obstacles in the beginning of the year. The overseas epidemic has invaded, and the delivery of high-end imported raw materials has been delayed. Due to the epidemic, many places in China have closed high-speed entrances and exits, temporary traffic control, and enterprises have stopped work and production. Some chemical companies were planning to close the holiday early, but they did not expect to receive a notice before the holiday, and arranged to stop work for two months after the year, which made many chemical workers lament.
Tens of thousands of chemical companies may be affected, and a variety of chemical products are facing “out of stock”!
Once production is stopped and restricted, the inventory in the market will definitely be affected. So, what chemical products will be affected by the suspension of production and production in the above major chemical provinces? According to incomplete statistics from the Paint Purchasing Network, Shandong, Henan, and Hebei are all important chemical towns, and there are many industrial chains of chemical products.
Shandong: There are more than 7,700 chemical enterprises, and the output of many chemical sectors ranks first in the country
Shandong is a major chemical province, and the total chemical economy has ranked first in the country for 28 consecutive years. The chemical products of national key statistics are all distributed, forming the “seven major sectors” industrial system of refining, chemical fertilizer, inorganic chemical, organic chemical, rubber processing, fine chemical, and synthetic materials, and the output of key chemical products ranks in the forefront of the country. At present, there are 84 chemical parks in Shandong, with more than 7,700 chemical enterprises.
From the perspective of supply, the output of chemical products in Shandong Province accounts for a high proportion of the country, and it is concentrated in traditional industries such as chlor-alkali, plastics, and fertilizers. The output of crude oil processing, tires, fertilizers, pesticides, caustic soda and other products ranks among the top in the country. From the perspective of industrial classification, Shandong’s oil refining (including refining and chemical integrated enterprises) and chemical (including petrochemical, coal chemical, salt chemical, tire, new materials, fine chemical) enterprises have relatively large production capacity.
Local companies include Sinopec, Wanhua Chemical, Hengli Petrochemical, Rongsheng Petrochemical, Enjie, Baofeng Energy, China Jushi, Hualu Hengsheng, Tinci Materials, Dongming Petrochemical, Lihuayi, Haike Group, Jingbo Group, Qilu Petrochemical, Luxi Chemical, Lubei Chemical, Shida Shenghua, Qixiang Tengda.
Henan: more than 2,000 well-known chemical companies, including petrochemical and coking industry chains
Henan Province includes 47 chemical industry parks (including chemical industry agglomeration areas, chemical industry characteristic industrial parks, professional chemical industry parks, etc.) and more than 2,000 well-known chemical enterprises. Mainly in petrochemical, coking-based. Henan Province proposes to build a nationally important 500 billion-level modern industrial cluster by 2025. Cultivate industrial chains of hundreds of billions of dollars such as modern coal chemical industry and high-end petrochemical industry, develop characteristic industrial chains such as chlor-alkali chemical industry, fluorine chemical industry, functional materials, etc., accelerate the transformation of traditional chemical industry to fine chemical industry, and improve the intrinsic safety and green level of the chemical industry.
Well-known chemical companies in Henan include Longbai Group, Shenma Co., Ltd., Polyfluoride, Ruifeng New Materials, Xinxiang Chemical Fiber, Henan Energy Chemical Group Co., Ltd., Haohua Yuhang Chemical Co., Ltd., etc.
Hebei: more than 2,200 well-known chemical companies, with a wide distribution of salt chemical and fine chemical industry chains.
Hebei Province is an important chemical base in China. The top 500 chemical companies account for about 8% of the country’s total, second only to Shandong Province and Jiangsu Province. Including 19 chemical parks and more than 2,200 well-known chemical companies.
Hebei Province has formed an industrial system focusing on oil and gas exploration, oil refining, coal chemical industry, salt chemical industry and fine chemical industry. The output of caustic soda accounts for about 4% of the national output, and the output of soda ash accounts for more than 12% of the national output. Well-known chemical companies include Sanyou Chemical, Longxing Chemical, Jizhong Energy, Cangzhou Dahua, Jianxin Co., Ltd. and Kailuan Co., Ltd.
It is not difficult to see that there are more than 10,000 well-known chemical companies in the above regions, covering Wanhua Chemical, Hengli Petrochemical, Luxi Chemical, Shida Shenghua, Qixiang Tengda, Longbai Group, Shenma, Dofluoroduo, Sanyou Chemical, Cangzhou Dahua and many other well-known chemical companies. Although the local listed chemical companies have not yet issued an announcement on the suspension of production and production, the “all factories shut down” and “all those with boilers” mentioned by local companies have obviously brought anxiety to many companies.
As the Spring Festival is approaching, more and more companies are beginning to take holidays, but no one can say with certainty when they can resume work after the festival, or when they will resume production at full capacity. That is to say, large factories in these areas will face the dilemma of shutting down production, and the market inventory of chemical products in the coal chemical, petrochemical, coking refining and fine chemical industry chains will all have the risk of sharp decline. A wave of out-of-stocks.
September 28, 2021
More on China Energy Programs
China’s crackdown on intensive energy use ripples across petrochemical sector
Highlights
Cracker, PDH plants mull output cuts, hikes amid impact on margins
Coal shortage further constrains operations in coal-olefin sector
Bigger producers can gain — if they manage energy costs
China’s increasingly strident efforts to curb intensive energy use and hasten carbon emission cuts are prompting petrochemical makers using LPG or naphtha as feedstock to adjust run rates in response to the various impacts the move is having across the petrochemical sector.
The crackdown comes at a time when prices of LNG, a cleaner but costlier alternative to coal as a generating fuel, are rallying ahead of winter and coal usage by households for heating is being prioritized over industrial requirements amid low stockpiles and concerns over generation capacity.
The coal shortage is constraining operations in the coal-olefin industry, while higher LNG costs for generation are impacting the economics of petrochemical plants that use other feedstocks.
China’s total electricity consumption rose 13.8% over January-August, outpacing an 11.3% increase in power generation over the same period, National Development and Reform Commission data showed.
The coal-olefin sector has cut runs to reduce intense power usage after the Yuan 126 billion ($19.6 billion) coal-olefins plant in northwest Shaanxi province was suspended for flouting energy consumption limits.
That sector is estimated to account for 20%-25% of China’s polypropylene production. The rest is estimated to come from oil — mainly naphtha cracking at steam crackers — at 55%, with LPG cracking at propane and mixed alkane dehydrogenation plants accounting for 12%-14% and methanol around 6%, according to data from domestic information provider Longzhong and industry sources.
LPG demand from the chemical and petrochemical sectors was estimated to account for more than half of China’s total LPG demand in 2020, Longzhong data showed.
Coal-fired power plants generate around 50% of China’s electricity supply.
Lower PP output
Reduced PP production from coal-olefin plants could result in higher PP margins, which could theoretically provide more market share for the LPG cracking sector, including PDH plants and boost LPG demand by 10%, a trade source with China Gas said.
However, operating rates at some PDH plants, especially those in eastern Jiangsu and southern Guangdong provinces, are also expected to be affected by local governments’ power-rationing policies, market sources said.
The NDRC has alerted 10 provinces or regions including Guangdong, Jiangsu, Yunnan, Fujian, Shaanxi, Guangxi, Ningxia, Qinghai, Xinjiang and Hubei that they have not met energy-consumption targets for the first half of 2021.
Guangdong recently imposed a new round of power rationing on industrial users, cutting their power supply for 4-5 days a week, according to a report by the province’s development and reform commission Sept. 25.
Dongguan Juzhengyuan in Guangdong shut its PDH plant for four days in September due to power rationing, reducing its operating rate to 69.75% from full capacity in August, according to domestic energy information provider JLC.
Jiangsu has also enforced power rationing on industrial users, supplying power for two days and cutting supply for two days, local media reported.
Oriental Energy has lowered the operating rate at its Zhangjiagang PDH plant in Jiangsu in September due to power rationing, market sources said.
Crunching margins were also constraining operating rates at many PDH plants. Their LPG feedstock import costs have risen significantly in recent months, while the domestic price of their propylene has lagged far behind amid weak demand from downstream plants.
Chemical and petrochemical plants are also considered energy-intensive enterprises and their operating rates have been limited or cut by some local governments, domestic media reported.
“We are still watching for more government announcements regarding the power cut issue,” an industry source said. “So far we are not expecting much impact on the PDH side, more on the coal-to-olefin side. As for crackers/PDH plants, as long as they are not under maintenance or facing technical issues, they will be running at maximum rates.”
LPG demand boost
But another trade source said power cuts by provinces and shrinking margins had prompted SP Chemical to lower operating rates at its 700,000 mt/year LPG-based cracker at Taixing in Jiangsu to 60-70% of capacity, while a company source said Jiangsu Sailboat Petrochemical was delaying the restart of its methanol-to-olefins plant.
The trade source said major petrochemical producers that were able to afford and procure alternative generating fuel such as LNG or Russian piped gas – as happened in 2018 – could boost operating rates at PDH plants or steam crackers to leverage the prospects of higher PP margins.
Soaring LNG prices have encouraged some factories, mostly ceramic makers, to switch to LPG as burning fuel from natural gas. This was expected to lift LPG demand to a limited extent, a trade source in Shanghai said.
Natural gas demand from the power generation sector was estimated to comprise 16% of China’s total gas demand in 2020, National Energy Administration data showed.
Regional LPG prices hovering near seven-year highs have prompted some ethylene producers to switch to cheaper naphtha as feedstock, though this is estimated to reduce LPG demand by less than 10%, another source said.
“The strength of naphtha is because of expensive LPG. There is more demand from petrochemical producers as they are cutting their use of butane and propane in cracking,” a Singapore-based naphtha trader said.
But one Chinese petrochemical source said trading firm Unipec was heard buying less naphtha than in previous years, and increasing imports of light crude.
September 28, 2021
More on China Energy Programs
China’s crackdown on intensive energy use ripples across petrochemical sector
Highlights
Cracker, PDH plants mull output cuts, hikes amid impact on margins
Coal shortage further constrains operations in coal-olefin sector
Bigger producers can gain — if they manage energy costs
China’s increasingly strident efforts to curb intensive energy use and hasten carbon emission cuts are prompting petrochemical makers using LPG or naphtha as feedstock to adjust run rates in response to the various impacts the move is having across the petrochemical sector.
The crackdown comes at a time when prices of LNG, a cleaner but costlier alternative to coal as a generating fuel, are rallying ahead of winter and coal usage by households for heating is being prioritized over industrial requirements amid low stockpiles and concerns over generation capacity.
The coal shortage is constraining operations in the coal-olefin industry, while higher LNG costs for generation are impacting the economics of petrochemical plants that use other feedstocks.
China’s total electricity consumption rose 13.8% over January-August, outpacing an 11.3% increase in power generation over the same period, National Development and Reform Commission data showed.
The coal-olefin sector has cut runs to reduce intense power usage after the Yuan 126 billion ($19.6 billion) coal-olefins plant in northwest Shaanxi province was suspended for flouting energy consumption limits.
That sector is estimated to account for 20%-25% of China’s polypropylene production. The rest is estimated to come from oil — mainly naphtha cracking at steam crackers — at 55%, with LPG cracking at propane and mixed alkane dehydrogenation plants accounting for 12%-14% and methanol around 6%, according to data from domestic information provider Longzhong and industry sources.
LPG demand from the chemical and petrochemical sectors was estimated to account for more than half of China’s total LPG demand in 2020, Longzhong data showed.
Coal-fired power plants generate around 50% of China’s electricity supply.
Lower PP output
Reduced PP production from coal-olefin plants could result in higher PP margins, which could theoretically provide more market share for the LPG cracking sector, including PDH plants and boost LPG demand by 10%, a trade source with China Gas said.
However, operating rates at some PDH plants, especially those in eastern Jiangsu and southern Guangdong provinces, are also expected to be affected by local governments’ power-rationing policies, market sources said.
The NDRC has alerted 10 provinces or regions including Guangdong, Jiangsu, Yunnan, Fujian, Shaanxi, Guangxi, Ningxia, Qinghai, Xinjiang and Hubei that they have not met energy-consumption targets for the first half of 2021.
Guangdong recently imposed a new round of power rationing on industrial users, cutting their power supply for 4-5 days a week, according to a report by the province’s development and reform commission Sept. 25.
Dongguan Juzhengyuan in Guangdong shut its PDH plant for four days in September due to power rationing, reducing its operating rate to 69.75% from full capacity in August, according to domestic energy information provider JLC.
Jiangsu has also enforced power rationing on industrial users, supplying power for two days and cutting supply for two days, local media reported.
Oriental Energy has lowered the operating rate at its Zhangjiagang PDH plant in Jiangsu in September due to power rationing, market sources said.
Crunching margins were also constraining operating rates at many PDH plants. Their LPG feedstock import costs have risen significantly in recent months, while the domestic price of their propylene has lagged far behind amid weak demand from downstream plants.
Chemical and petrochemical plants are also considered energy-intensive enterprises and their operating rates have been limited or cut by some local governments, domestic media reported.
“We are still watching for more government announcements regarding the power cut issue,” an industry source said. “So far we are not expecting much impact on the PDH side, more on the coal-to-olefin side. As for crackers/PDH plants, as long as they are not under maintenance or facing technical issues, they will be running at maximum rates.”
LPG demand boost
But another trade source said power cuts by provinces and shrinking margins had prompted SP Chemical to lower operating rates at its 700,000 mt/year LPG-based cracker at Taixing in Jiangsu to 60-70% of capacity, while a company source said Jiangsu Sailboat Petrochemical was delaying the restart of its methanol-to-olefins plant.
The trade source said major petrochemical producers that were able to afford and procure alternative generating fuel such as LNG or Russian piped gas – as happened in 2018 – could boost operating rates at PDH plants or steam crackers to leverage the prospects of higher PP margins.
Soaring LNG prices have encouraged some factories, mostly ceramic makers, to switch to LPG as burning fuel from natural gas. This was expected to lift LPG demand to a limited extent, a trade source in Shanghai said.
Natural gas demand from the power generation sector was estimated to comprise 16% of China’s total gas demand in 2020, National Energy Administration data showed.
Regional LPG prices hovering near seven-year highs have prompted some ethylene producers to switch to cheaper naphtha as feedstock, though this is estimated to reduce LPG demand by less than 10%, another source said.
“The strength of naphtha is because of expensive LPG. There is more demand from petrochemical producers as they are cutting their use of butane and propane in cracking,” a Singapore-based naphtha trader said.
But one Chinese petrochemical source said trading firm Unipec was heard buying less naphtha than in previous years, and increasing imports of light crude.
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