Affected by the epidemic, many places in Zhejiang have suspended work and production, and logistics and transportation in Xiaoshan, Shaoxing and other places have been affected!
Yesterday morning, Zhenhai issued a notice requiring all enterprises in the region to suspend operations except for epidemic prevention and people’s livelihood protection. Petrochemical continuous production enterprises reduce production loads.
Some company employees posted relevant screenshots on social media.
According to a release from Ningbo, the second round of nucleic acid testing for all employees in the closed area, control area and prevention area of Jiaochuan Street, Zhenhai District, Ningbo City, completed sampling of 141,229 people. As of 24:00 on the 8th, 127,921 test results have been issued, and 8 positive cases of infection have been detected. 3 cases of positive infection were found in routine nucleic acid tests at centralized isolation points, all of which were actively screened in the closed area of Jiaochuan Street. Find out. Yongji Apartment in Jiaochuan Street, Zhenhai District has been adjusted to a medium-risk area. Currently, Ningbo City has three medium-risk areas: Linjiang Community on Jiaochuan Street, Ningbo Alps Electronics Co., Ltd. on Jiaochuan Street, and Yongji Apartment on Jiaochuan Street.
At noon, Hangzhou and Shangyu also successively issued notices “About the Implementation of Restrictive Measures for Public Activities in Some Areas of Hangzhou” and “About Comprehensive Strengthening of Control Measures in the Region.” Among them, Shangyu issued a requirement: Starting from 2 p.m. on December 9, 2021, control and management measures will be strengthened in the entire Shangyu District. “Hazardous chemical companies must stop production in an orderly manner to ensure safety.” It is worth noting that yesterday afternoon, Shaoxing announced that starting from 16:00 on December 9, 2021, the city will launch a level 1 emergency response.
According to CCTV News, since December 5, as of 3 pm today, Ningbo, Shaoxing and Hangzhou in Zhejiang Province have reported a total of 24 confirmed cases and 35 asymptomatic infections. Among them, Ningbo has reported a total of 10 confirmed cases and 15 asymptomatic infections; Shaoxing has reported a total of 12 confirmed cases and 15 asymptomatic infections; Hangzhou has reported a total of 2 confirmed cases and 5 asymptomatic infections.
The reporter learned that the three areas where Zhejiang’s prevention and control have been upgraded are mostly chemical industry areas, bringing together textile raw material production, downstream polyester consumption, including aromatics industry, polyolefin industry, and hazardous chemicals production. Among them, the Zhenhai area is an important petrochemical base in China, and its management and control upgrades have a greater impact on some chemicals.
Yesterday evening, the listed company Zhengguang Shares issued an announcement. In order to actively respond to and cooperate with the epidemic control notice requirements issued by the Ningbo Petrochemical Economic and Technological Development Zone Management Committee, where Ningbo Zhengguang is located, the wholly-owned subsidiary Ningbo Zhengguang decided to start operations on December 10, 2021. Production will be temporarily suspended from now on, and the specific time for resumption of normal production and operations will be arranged according to the local government’s epidemic control requirements. This production suspension is expected to have a certain adverse impact on the company’s operating performance in the fourth quarter of 2021. The specific extent of the impact is subject to the audited 2021 annual financial report.
According to Dong Li, general manager of China Base Ningbo Polyester Division, the Ningbo Petrochemical Economic and Technological Development Zone is supported by the “Refining Ethylene” project and relies on the liquid chemical terminal. It uses olefins and aromatics as the main raw materials and focuses on the development of ethylene downstream, synthetic The petrochemical industry, featuring resins and basic organic chemical raw materials, has gradually formed an integrated upstream and downstream petrochemical industry chain. In the park, there is the largest Zhenhai liquid chemical terminal in the country, with an annual throughput capacity of over 5 million tons; there is the largest refining and chemical enterprise in the country, Zhenhai Refining and Chemical, with an annual oil refining capacity of 25 million tons and an ethylene production capacity of 1 million tons. Famous domestic and foreign companies that have settled in Ningbo Petrochemical Economic and Technological Development Zone include: Akzo Nobel of the Netherlands, LG Yongxing of South Korea, Daicel Chemical and Zhenyang Chemical of Japan, Zhongjin Petrochemical, Zhejiang New Materials, Ningbo Fude, Juhua Technology , Hangzhou Bay acrylic fiber, etc.
The reporter observed that most of the areas where the epidemic control has been upgraded are concentrated in the polyester industry chain. According to CCF statistics, in terms of the production capacity of the polyester industry chain in the three regions, PX, PTA, MEG, and polyester production capacity account for 35%, 18%, 6%, and 20% of the total domestic production capacity respectively.
Chart 1 The proportion of production capacity of the polyester industry chain in Ningbo, Shaoxing and Hangzhou
“The first-level response area for epidemic prevention will be expanded from the original Zhenhai and Shangyu districts, and Zhenhai and Shangyu districts mainly affect polyester raw material installations; with the expansion of the first-level response scope for epidemic prevention, Ningbo, Shaoxing, and Hangzhou will Local polyester and its downstream products account for a larger proportion, which affects the demand side more,” said He Lingli, senior analyst at CCF.
In terms of transportation, photos leaked on social media showed that all roads in Zhenhai were closed, making it impossible to enter or exit. A logistics company said: “After Zhenhai was closed, trucks were not allowed to leave, and cabinets at the terminal could not be delivered. Orders that had been cut off could not be picked up or packed. Now we are waiting for notification.”
An industry source told reporters that according to the latest news from the transport fleet, you can go to Ningxing to pick up goods with a pass, but because you are not healthy after picking up the goods,Under the orderly control of the epidemic, the impact of the epidemic on polyester’s operating rate and logistics will be limited, and the longest duration may be 14 to 21 days. ”
In Pang Chunyan’s view, the impact of this round of epidemic is expected to be gradually eliminated around New Year’s Day, when the New Year’s Day holiday will begin, followed by the Spring Festival, and demand is expected to gradually weaken. The PTA unit gradually recovered from the decline in December, and new ethylene glycol units are gradually entering the mass production period. Overall, polyester raw materials will usher in a seasonal accumulation cycle after January, and the impact is mainly reflected after the Spring Festival. “Before the Spring Festival, in addition to the key factor of oil prices, price fluctuations are more related to the pre-holiday stockings of downstream companies. If the Spring Festival is celebrated on a large scale across the country, there may be a Spring Festival stocking market before the holiday. How the specific market interprets it depends on Let’s look at the evolution of the epidemic control situation,” Pang Chunyan said.
Strong reality VS weak expectations, the trend of chemical products is divided
From the perspective of the impact of the escalation of epidemic prevention and control in Jiangsu and Zhejiang, in addition to the aromatics industry chain, the polyolefin industry chain, methanol, etc. will also be affected. However, judging from yesterday’s market, the trend of chemical products showed obvious differentiation.
The reporter learned that the main impact of this epidemic upgrade on the aromatics industry chain is that the main upstream devices in the Zhenhai area are Zhongjin Petrochemical and Zhenhai Refining and Chemical, which mainly produce pure benzene and PX, which are the main raw materials for styrene and PTA.
“At present, the styrene plant is normal, but PTA is blocked due to the shipment of Yisheng New Materials, and the load on the plant is reduced. If it lasts for a long time, it may force the upstream PX plant to reduce production, which will affect the output of PX and pure benzene, so it is bullish for PTA and the styrene market.” Pang Chunyan said that overall, the short-term positive impact will be positive, and whether the positive impact can continue to ferment in the later period depends on the time of logistics recovery.
However, it is worth mentioning that as both are aromatics industry chains, the trends of PTA and styrene were obviously divergent yesterday.
“To put it simply, the first response to the epidemic is the impact of demand. This is a slow variable. If it involves the shutdown of production capacity, this is a fast variable and the response will be faster.” Li Wang, Product Manager of the Liquefaction Department of Hangzhou Zhongjing Industrial He told reporters that the epidemic in Jiangsu and Zhejiang has had a greater impact on demand than supply for styrene. “The ABS factory in Ningbo is planning to shut down, but there is currently no definite news about the shutdown of styrene and pure benzene, and the market reaction is relatively weak.”
Jin Jia, head of styrene trading at Yuanda Energy, said that under the multiple intertwined impacts of the escalating epidemic and continued restrictions on terminal pickup, the styrene market maintains spot premiums, but absolute prices weaken.
“On the one hand, restrictions on delivery have forced some market participants to expand spot purchases to make up for the limitations of single-day delivery in each reservoir area. This has provided disguised support to the spot market, but at the same time it has also partially overdrawn actual future demand; on the other hand, short-term Export demand has slowed down the pace of inventory accumulation, making the actual inventory pressure relatively small, and the actual performance is not as weak as expected,” Jin Jia said.
A styrene researcher at SDIC Anxin Futures said that in terms of short-term impact, the local styrene plant is operating stably. “Whether there will be an impact in the later period depends on the time of control. If logistics cannot be restored for a long time, companies may face pressure from expanding tanks and be forced to reduce production.” In his view, the styrene market has not been affected by the epidemic. Against the background of overall overcapacity, the market mainly deals with the return of early maintenance equipment CNOOC and Shell, and the supply pressure brought about by the upcoming commissioning of new equipment Lihuayi and Wanhua Chemical.
“In terms of raw materials, pure benzene is still in the inventory accumulation cycle. The profit and absolute price of pure benzene are also weak. Cost support for styrene is also weak. The weakness of styrene is difficult to change.” Jin Jia said.
This closure has also affected the plasticizing market to a certain extent. The reporter learned that Zhenhai Refining and Chemical has a PP production capacity of 500,000 tons and a PE production capacity of 450,000 tons. For varieties such as polyolefins with abundant market supply, the impact is relatively limited.
“At present, the Zhenhai refining and chemical equipment is operating normally for the time being, and its specific load changes in the later period require continued attention.” Zhou Ao, an energy chemical researcher at Everbright Futures, said that in terms of downstream demand for polyolefins, plastic products companies in Zhenhai epidemic-related areas are currently temporarily The shutdown and production resumption time have not yet been determined, but due to its small size, the overall impact on polyolefin demand will be limited. However, the local methanol downstream Ningbo Fude MTO has been shut down for maintenance for 45 days before strict control. From the actual supply and demand point of view, the impact on methanol is weak. Overall, the Zhenhai incident has more of an impact on methanol’s sentiment towards liquid chemicals.
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