Impact from G20 Summit on PTA plant operation
On May 11th, 2016, the Housing and Urban-Rural Development Hall of Zhejiang Province issued documents regarding shutdown of manufacturers in and nearby Hangzhou where the G20 Summit will be held during Sep 4-5. According to the documents, Zhejiang Province is divided into three areas: core area, strict-control area and control area. Manufacturers are required to shut down during Aug 26th to Sep 6th.
The polyester, PTA, MEG capacity involved are listed below. However, a few Shanghai enterprises pointed out that they were involved as well, so Shanghai district is also included.
Capacity Details:
|
Unit: Mn MT/yr |
Xiaoshan |
Shaoxing |
Jiaxing |
Ningbo |
Huzhou |
Shanghai |
Total |
Proportion |
|
Polyester |
6.73 |
4.25 |
6.27 |
1.61 |
0.7 |
1.26 |
20.82 |
45% |
|
PTA |
0 |
3.2 (shut) |
1.5 |
6.75 |
0 |
1.15 |
12.6 (with 3.2 shut) |
27% |
|
MEG |
0 |
0 |
0.15 |
1.15 |
0 |
0.605 |
1.905 |
25% |
As we can see, the impact of G20 Summit is more severe on polyester section than PTA and MEG.
Anyway, the official announcement has not been placed to each plant though some received oral notice. But most enterprises have psychologically prepared for possible shutdown. Polyester run rates have kept high as some polyester plants are preparing stocks for shut-down compensation.
Concerning G20 Summit, a few PTA plants rescheduled their annual maintenance to Aug-Sep but some Ningbo plants such as FCFC and Mitsubishi has finished maintenance in the first half of the year and are reluctant to shut down, waiting for official notice.
PTA turnaround plans in Aug-Sep
| Company | Location | Capa. (Mn MT/yr) | Maintenance |
| Jiaxing PC (Tongkun) | Jiaxing | 1.5 | Two weeks in Aug-Sep |
| Jinshan PC | Shanghai | 0.4 | Aug 15-Sep 20 |
| OPSC | Shanghai | 0.75 | Aug 28-Sep 7 |
| Tianjin PC | Tianjin | 0.34 | 45 days since H1 Aug |
| Honggang | Lianyungang | 1.5 | 15-20 days in Sep |
| FCFC | Ningbo | 1.2 | N/A |
| Mitsubishi | Ningbo | 0.7 | |
| Yisheng | Ningbo | 4.85 |
Currently, PTA-PX spread shrinks to below 400yuan/mt and PTA run rate recovers to a high level. Major suppliers have no intentions to cut production for better profits. Till now, only Urumqi Petrochemical and Hanbang Petrochemical have turnaround plans for June. If polyester O/R stays at 80-82% in whole June, PTA supply and demand may achieve balance. PTA-PX spread may not decrease much and PTA prices find supports in the short term. But from a longer term point of view, PTA market may adopt a bearish tone.
