PO: One more new role, one less pricing power

7On March 22, the Daishan Branch of Zhoushan Ecological Environment Bureau announced that Zhejiang Petrochemical Co., Ltd. has added 1.4 million Announcement of approval opinions on the project of ton-year ethylene and downstream chemical equipment (optimization of product structure of the second phase project).

This project involves 380,000 tons of polyether polyol plant (mainly including two polyether polyol (PPG) production lines prepared by alkali metal catalysts, one DMC continuous polyether polyol (PPG) production line, two polymer polyether polyol Alcohol (POP) production line) and 27/600,000 tons PO/SM unit.

It is also new production capacity, 2021 In the middle of the year, the second phase of Hishell, Sinochem Quanzhou, and Fuqiang New Materials have been put into production one after another, Cyproterene broke the 20,000 yuan/ton mark. The main reason is that the domestic demand continues to improve, peripheral Saudi Arabia, new shell maintenance, coupled with the force majeure of the polyether cyclopropylene plant in the United States, the export volume of polyether, which accounts for 78% of the downstream consumption of cyclopropane, has increased significantly, with a month-on-month increase of 47.5% to 62.7 tons. So far in 2022, the second phase of Zhenhai, Jiangsu Yida, and Bohai Chemical have been put into production smoothly, and China’s cyclopropane production capacity has reached 4.947 million tons, a year-on-year increase of 15.1%. The price of cyclopropane fell from 12,250 yuan/ton at the beginning of the year to 7,900 yuan/ton, a drop of 35.5%.

The main reason is that in addition to the impact of unexpected factors such as the conflict between Russia and Ukraine and its sanctions, a new round of domestic epidemics and its control policies, both supply and demand have declined, industrial production, corporate investment, consumer consumption, and international trade have slowed down. The growth rate has dropped significantly, and the global inflation level has risen in an all-round way, resulting in weak demand for cyclopropylene polyether polyols, high inventory, and difficulty in improving domestic export orders, resulting in a market that “falls” every now and then; new orders are hard to come by , The pessimistic expectations lead to a situation where the industry has no choice but to “lie down” and then “lie down”.

Although this year also continued the negative price reduction operation, except for the routine maintenance of faults, the industry’s operating rate remained at 55%~68%, but the effect was quite different from last year. In addition to the unstable demand for cyclopropane, more Newly entered the role, the price competition is more intense, the supply and demand pattern of cyclopropane has changed from a balanced point to a loose one, the profit margin has gradually narrowed, and the right to speak in pricing has gradually shifted to the middle and lower reaches. At that time, the price will be the most direct way to reflect it.