Chinese petchem firms, refiners expand cracker capacity

: LPG, Oil products, Petrochemicals
20/07/28

Three new large steam crackers are on course to start up in China in August, boosting demand for petrochemical feedstocks such as naphtha and LPG.

Bora Chemical is due to be the first company to start its cracker, followed by state-controlled Sinopec's new Zhanjiang refining arm and state-owned Sinochem's Quanzhou operations.

Bora LyondellBasell, a 50:50 joint venture between global petrochemical firm LyondellBasell and local refinery Bora Chemical, started trial runs at its steam cracker on 27 July, according to market participants. This could not be confirmed with the company. The official start-up has been scheduled for 2 August.

The cracker, at Panjin in northeast China's Liaoning province, has 1.1mn t/yr of ethylene and 690,000 t/yr of propylene capacity. Its derivative units include 120,000 t/yr of butadiene (BD), 450,000 t/yr of linear low-density polyethylene (LLDPE), 350,000 t/yr of high-density polyethylene (HDPE), 350,000 t/yr of styrene monomer (SM) and 600,000 t/yr of polypropylene (PP).

The company plans to start up downstream PE and PP units together with the cracker, fed by purchased ethylene and propylene in the initial stage. The BD capacity is scheduled to start on 7 August. The SM capacity is in the process of starting up and Bora achieved on-specification production of ethylbenzene, a feedstock for SM, on 27 July.

Bora LyondellBasell's new cracker will run partly on merchant propane, which is estimated to make up around 44pc of its cracker feed slate. The remaining 56pc will mainly comprise naphtha and a small amount of light hydrocarbons from Bora's 140,000 b/d Panjin refinery.

The joint venture's sales agreement calls for Bora Chemical to market the LLDPE and SM, while LyondellBasell will market the HDPE and PP.

Two other crackers are poised to come on line next month. State-controlled Sinopec has set a 21 August date to start its naphtha cracker at Zhanjiang in Guangdong province. The cracker has 800,000 t/yr of ethylene and 430,000 t/yr of propylene capacity and is integrated with 250,000/400,000 t/yr ethylene oxide/ethylene glycol (EO/EG), 350,000 t/yr HDPE, 100,000 t/yr ethylene vinyl acetate (EVA) and 550,000 t/yr PP derivative units.

And fellow state-controlled firm Sinochem is now looking to start up its Quanzhou naphtha cracker at the end of August. The cracker has 1mn t/yr of ethylene and 500,000 t/yr of propylene capacity, and a full stream of petrochemical derivative units including 100,000 t/yr EVA, 400,000 t/yr HDPE, 200,000/450,000 propylene oxide/styrene (PO/SM), 580,000 t/yr PP and 120,000 t/yr BD capacity.

Sinopec Zhanjiang is buying LPG for its new cracker, while Sinochem has its own LPG supplies from the Quanzhou refinery. LPG is likely to make up about 10pc of the crackers' feedstock mixes.

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25/04/07

Flooding on US rivers mires barge transit

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US PE exports could lose market share on new tariffs

25/04/04

US PE exports could lose market share on new tariffs

Houston, 4 April (Argus) — US polyethylene (PE) traders are concerned that retaliatory tariffs announced this week by China and being considered by the European Union will close the door to two of the biggest markets for US resin exports. China announced today it will impose a 34pc tariff on all imports from the US from 10 April, while the EU is in the process of finalizing countermeasures this week, all in response to widespread tariffs announced by US president Donald Trump on 2 April. "This closes off China," said one US export trader. "And it looks like a full stop in Europe too." The US exported 2.4mn t of PE to China in 2024, representing 16.8pc of total US PE exports, according to data from Global Trade Tracker. Exports to the EU totaled 2.26mn t, representing 15pc of all US exports. US PE exports in 2024 totaled 14.2mn t, with exports representing 47pc of total sales last year. During the previous Trump administration, China provided waivers for certain tariffs, including on some PE grades. Some market participants have said that may be possible again, while others have said they see it as less likely, as China has become more self-sufficient, and has other alternative suppliers, such as the Middle East. "(China) is in a better position to impose tariffs on PE today than they were in 2018," said one North American PE producer. It will be difficult for US producers to make up for the loss of market share in China and the EU, which could result in producers needing to slow operating rates. For now, markets in Africa, Latin America and southeast Asia, remain open for US material, but traders are concerned that other top trading partners could also retaliate against the US, closing off additional markets. "There are not enough places to go with this stuff," the trader said. With limited export opportunities, the North American PE producer agreed that production would likely need to slow to keep material from backing up in the domestic market and causing domestic prices to fall. "The last time we saw tariff action from China, there was an impact on the domestic market," the producer said. "Pricing went down." For this week, US PE export pricing has held fairly steady as the market absorbs the tariff news. But market participants said they believe prices could move down in the coming weeks if production is not slowed. By Michelle Klump Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Tariffs and their impact larger than expected: Powell

25/04/04

Tariffs and their impact larger than expected: Powell

New York, 4 April (Argus) — Federal Reserve chairman Jerome Powell said today tariff increases unveiled by US president Donald Trump will be "significantly larger" than expected, as will the expected economic fallout. "The same is likely to be true of the economic effects, which will include higher inflation and slower growth," Powell said today at the Society for Advancing Business Editing and Writing's annual conference in Arlington, Virginia. The central bank will continue to carefully monitor incoming data to assess the outlook and the balance of risks, he said. "We're well positioned to wait for greater clarity before considering any adjustments to our policy stance," Powell added. "It is too soon to say what will be the appropriate path for monetary policy." As of 1pm ET today, Fed funds futures markets are pricing in 29pc odds of a quarter point cut by the Federal Reserve at its next meeting in May and 99pc odds of at least a quarter point rate cut in June. Earlier in the day the June odds were at 100pc. The Fed chairman spoke after trillions of dollars in value were wiped off stock markets around the world and crude prices plummeted following Trump's rollout of across-the-board tariffs earlier in the week. Just before his appearance, Trump pressed Powell in a post on his social media platform to "STOP PLAYING POLITICS!" and cut interest rates without delay. A closely-watched government report showed the US added a greater-than-expected 228,000 jobs in March , showing hiring was picking up last month. By Stephen Cunningham Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

UK considers import tariffs on US oil products

25/04/04

UK considers import tariffs on US oil products

London, 4 April (Argus) — The UK government has included refined oil products from the US in a list of goods that could be subject to retaliatory tariffs. The government said it was considering "potential tariff measures on US goods, should this be deemed necessary" in response to a 10pc US import tariff on UK goods and services — excluding energy — due to take effect on 5 April. The consultation will last until 1 May. Light oils, gasoils, jet fuel, fuel oils, lubricants and bitumen all feature in the list of products possibly subject to retaliatory tariffs. The UK could be particularly exposed to any tariff impact on US middle distillate imports in the event of retaliation. The UK sourced over a quarter of its 14.37mn t of 10ppm diesel and gasoil from the US last year, according to Vortexa, while 3pc of its 10.15mn t of jet and kerosine imports were sourced from the US. It is not clear what tariff rate the UK is targeting in its potential retaliation. For other oil products, any potential import tariff impact would become more muted as US refined product imports become less significant. The UK received just 6pc of its 1.92mn t total fuel oil imports from the US last year, while the UK was the fourth largest gasoline supplier to the US and received none of the product from its trade partner. European refined product values have collapsed as a result of the escalating trade war which saw China retaliate today against the US' latest tariff action. Eurobob non-oxy gasoline barge prices dropped by 4pc to $700.75/t on 3 April at a time when trading activity typically picks up ahead of the US summer driving season. Indicated non-oxy barge values were set to drop further in the trading session today. The EU is similarly preparing countermeasures against US import tariffs, which Washington set at 20pc from 9 April in addition to existing rates. Ice gasoil futures had dropped by 10pc since President Trump announced the new tariff regime on 2 April to $615.75/t by the close today. Ice gasoil futures are used as the pricing basis against which diesel, gasoil and jet fuel grades are assessed in the European middle distillates markets. European refined products market participants have pointed to a darker global economic outlook triggered by the US import tariffs as the driving force behind the drop-off in European product values. By George Maher-Bonnett Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

US-origin PE, PP appear in provisional UK tariff list

25/04/04

US-origin PE, PP appear in provisional UK tariff list

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