Urethane Blog

Chinese Olympics Shutdown Update

January 20, 2022

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.