China Oriental, Zhejiang Satellite shut PDH units

Market: LPG, Petrochemicals
04/03/20

Chinese private-sector firms Oriental Energy and Zhejiang Satellite shut their propane dehydrogenation (PDH) units yesterday for maintenance.

Oriental Energy shut its 600,000 t/yr Zhangjiagang-based PDH unit in east China's Jiangsu province, together with its downstream 400,000 t/yr polypropylene (PP) unit, for a turnaround to last about a month.

Zhejiang Satellite shut its 450,000 t/yr No.1 PDH unit at Jiaxing in east China's Zhejiang province, along with its derivative 480,000 t/yr acrylic acid capacity, for about 15 days of maintenance. Production at its two PP units each with 300,000 t/yr capacity was maintained.

Both shutdowns were brought forward from an earlier scheduled late March because of issues of high product inventories and a downbeat price outlook for propane amid the impact of the coronavirus outbreak.

The earlier shutdowns benefit PDH margins because propane prices are likely to fall in April with emerging US supplies. The two companies yesterday obtained approvals from the Chinese government for the waiver of the 25pc import tariff imposed on US-origin propane.

Chinese's PDH operating rate have fallen sharply to 63pc as of today from a previous 76pc for the previous two weeks. Tianjin Bohua has continued to extend the shutdown at its 600,000 t/yr plant in north China with no specified restart.

The shutdowns have pushed up China domestic propylene prices by about 50-100 yuan/t ($7-14/t) today to Yn6,550-6,600/t ex-tank Shandong and Yn6,100-6,350/t ex-tank east China.

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