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China:Power Brownouts in Zhejiang and Chemical & Fiber Industry

https://www.chemnet.com   Jul 21,2010
Zhejiang Province decided to limit power used by high energy-consuming and high emission producers from 1 July to 13 September. The period will be divided into five phases. Herein CBI Chemical & Fiber Team made a one-week-long survey on the influence of the power brownouts on the chemical & fiber industry.


Upstream:


Zhejiang is the most important PTA production base in China with the PTA capacity accounting for 27% of the national total. Yuandong Shaoxing's capacity is at 1.8 million tones/year, Yisheng Ningbo's capacity at 1.2 million tones/year, Ningbo FCFC’s capacity at 800,000 tonnes/year and Ningbo MITSUBISHI's capacity at 600,000 tonnes/year. Because PTA industry is not a high-consuming and high-emission industry and has great contribution to GDP in the province, so it is very likely that PTA producers will not be restricted in power usage. At present, PTA industry enjoys healthy margin room and the average profits hit CNY1,150/tonne in the first half of 2010.


Zhenhai Refenery is a major ethylene integration plant in Zhejiang with a 650,000 tonnes/year MEG unit and a 530,000 tonnes/year unit. Because the plant is equipped with power generation, its power usage will be not restricted.


Downstream:


Many polyester producers said they would cut output or stop production in coming three months. If large-sized producers have emission reduction and power brownout plans, they shall apply to the provincial government; if small-sized ones have such plans, they shall apply to sub-departments. In Shaoxing, Shichuang's 400,000 tonnes/year polymerization unit will be shut down on 1 August for 15-day maintenance and Zhongheng's 400,000 tonnes/year unit will be shut down on 15 August for 15-day maintenance.


ACN: The industry is less affected by the regulation of power brownouts and emission reduction in Zhejiang. Among AF producers, only Hangzhouwan AF Plant's power usage was restricted. The plant has capacity of 60,000 tonnes/year and it will be shut down for maintenance in July. Another AF plant in Zhejiang, Ningbo Zhongxin AF Plant is running around 60%. Ningbo LG Yongxing's 600,000 tonnes/year ABS unit and Nignbo FCFC's 300,000 tonnes/year ABS unit run well and are not affected by the regulation. Operating rates of amide plants were low on high upstream values but the regulation has light impact on the industry because it is not one of high-energy-consuming and high-emission industries.


CPL: Among the 16 CPL producers involved in the regulation in Zhejiang, there are 10 civil yarn producers and 6 chip and cord fabric producers.


Among 10 civil yarn producers, Zhejiang Jinsheng plans to shut down some units from 15 July to 20 July and to shut down the rest units during 1-15 August. Zhejiang Yaxing's operating rates fell to 70%. Other producers have no specific plans.


Among 6 chip and cord fabric producers, Hongfu will launch 20-30 days' maintenance and the rest have no projects.
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