The Urethane Blog

Environmental Inspections Driving Chinese PO Price

Environmental Protection Inspection Contributes to PO Price Soaring

2016-09-22    [Source:PUdaily]


PUdaily, Shanghai-In traditional peak season, it’s normal that the propylene oxide (PO) price goes up. However, the price is rocketing unexpectedly this year especially in recent months. Since late August, in N-China, it has increased from RMB 9,500/ton to RMB 11,250/ton in bulk and DEL, dramatically by RMB 1,750/ton. According to the chart below, the price increase of PO this year is RMB 800/ton higher than that of 2015 when compared with the same period of last year.

The significant price increase is not only because of the traditional peak season from downstream industries, but also the tight supply caused by the environmental protection inspection to all the chlorohydrin propylene oxide plants from Shandong Environmental Protection Office.

As announcement, this diagnostic test started in early September, and inspection items include pollution control equipment and its running condition, standard discharge of waste water & gas as well as specification for waste disposal. During September 6 to 9, Shandong Environmental Protection Office did supervision survey to Zibo, Dongying and Binzhou. On September 18, the investigation report was submitted and released.

Affected by this inspection, some PO plants start or just plan to lower down their operation load, even shut down for maintenance or technique upgrade, which lead to resources lack for traditional peak season. Therefore, the tight supply contributes to PO prices soaring up.

The following table is some plants’ maintenance dynamic in September or later.

Plants Maintenance Dynamic
Shandong Befar One PO facility with 80kt/year in Dongrui has maintenance plan in late Sep. or early Oct.
Shandong Jinling Chlor-alkali facility may lowers down 50% operation load and PO facilities may be affected for 10 days
Shandong Shida Shenghua Shuts down for regular maintenance on Aug. 25 and will last for one month
Wudi Xinyue Lowers load to 70%-80% due to power plant malfunction on Sep. 5 and resumes on Sep. 11, then shuts down at the night of Sep.21 and may last for 2-3 days
Shandong Daze Shuts down on Sep. 7 for technical upgrade and the restart time is uncertain yet
Zhonghai Jingxi Shuts down for overhaul since Jan. 6 and will resume in the second half year with uncertain specific time
Shandong Huatai Shuts down due to power plant malfunction on Sep. 6 and recovered on Sep. 9; plans to shut down again on Oct. 10 and last for 10-20 days
Yantai Wanhua Plans to shut down on Oct. 3 to Oct. 18

In short-term, the price will keep increasing on account of the tight supply for the maintenance plan of some PO plants in Shandong province from late September to early October. However, the price will edge up within limited range in the future because downstream plants will resist purchasing high-price resources with enough inventories prepared recently.