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Polyester value chain: the influence of recent pandemic in Zhejiang

Views: 1     Author: Site Editor     Publish Time: 2022-01-26      Origin: Site

Ningbo, Shaoxing and Hangzhou of Zhejiang saw new COVID-19 infections again recently and the epidemic prevention and control are also being escalating. Starting from 2: 00 on December 7, 2021, Ningbo launched a level I emergency response and temporarily implement closed management in Zhenhai district. Shaoxing upgraded its COVID-19 emergency response to the highest level on the afternoon of Dec 9.

The specific proportion of Ningbo, Shaoxing and Hangzhou on polyester value chain is listed as follows:

Polyester and   feedstock capacity in Ningbo, Shaoxing and Zhejiang

Region

Product

Proportion of   national total

Ningbo, Shaoxing and   Hangzhou

PX

35%

PTA

18%

MEG

6%

Polyester

20%

Ningbo

PX

35%

PTA

16%

MEG

6%

Polyester

3%

Shaoxing

PX

No PX capacity

PTA

2%

MEG

No MEG capacity

Polyester

7%

Hangzhou

PX

No PX, MEG and PTA   capacity

PTA

MEG

Polyester

10%

According to the development of the Covid-19 and the need for prevention and control, as of 16:00 on December 9, only Zhenhai District of Ningbo and Shangyu District of Shaoxing initiated level 1 response. There are two PX units in Zhenhai: Sinopec ZRCC, Zhongjin PC; 1 PTA unit: Yisheng New Materials; 2 MEG units: ZRCC and Fund Energy. There are no polyester units in Zhenhai; there are no polyester feedstock and product units in Shangyu District of Shaoxing.

By Dec 9, the operating rate of polyester feedstock and polyester products producers was unchanged temporarily. Only Yisheng New Material's PTA unit cut run rate. ZRCC's unit turned to produce MEG due to short demand for EO, with MEG production at full capacity.

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Shaoxing also launched a level I emergency response on Dec 9. Therefore, the operation of polyester units in Shaoxing may be impacted in the future.

The ports in Shangyu District of Shaoxing and Zhenhai District of Ningbo all suspended delivering as of P.M. 4:00 on Dec 9. The entry and exit will be impacted in factories near Ningbo, Shaoxing and Hangzhou as all the drivers need to provide nucleic acid test within 48 hours or tour code.buy polyester grey fabric - Daditextile

The situation is escalating with the spread of pandemic, not ruling out the regulation of transportation and production being intensified in these 3 regions, which will have bigger influence on the factories on the polyester value chain.

Feedstock inventory of factories may be inadequate when the speed of goods delivery turns slower. Factories may see mounting stocks. As a result, the operating rate of plants is expected to be impacted and the influence on the downstream market will be bigger than that on upstream market.

Players turn to concern the impact of demand from the influence on the feedstock supply as the pandemic prevention and control is escalating.

Except for the spread of pandemic, rising cost and sluggish downstream demand will be also influential in short run. It will have support from cost side in short term as crude oil price is increasing in recent one week. As for demand, with the coming of Spring Festival (Feb 1), the operating rate of downstream plants is decreasing. By Dec 9, the operating rate of DTY plants, fabric mills and printing and dyeing plants was at 80%, 64% and 64% respectively, lower than the average level year to date.

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