Singapore (Platts)--26Nov2010/617 am EST/1117 GMT
China's state-owned Sinopec is forced to reduce production rates at downstream petrochemical plants, such as polyethylene, polypropylene and monoethylene glycol plants, in order to boost diesel production to ease the shortage in the country, company sources said Friday. The rate cuts will affect Sinopec Maoming Company, Sinopec Shanghai Petrochemical Company, Sinopec Zhenhai Refining & Chemical Company and Sinopec Guangzhou Company. "Our national MEG production will be reduced by about 10%," said a company source. "This will be due to the reduction of ethylene availability." While MEG plants are expected to continue running, various PE and PP lines will be shut for turnarounds during this period. Refiners have started to produce diesel at the expense of naphtha production. With less naphtha available, ethylene and propylene production has been reduced and this, in turn, has cut output of polyethylene and polypropylene. Market sources, however, noted that low demand for polymers during the last quarter of each year means the production cuts will not leave a huge impact on the polymer markets. ZRCC will shut its 300,000 mt/year high density polyethylene line and 300,000 mt/year PP line in early December, one of the sources said. The HDPE line will be shut for about 15 days, according to a report by Chinese publisher Treasure Island or JYD. Shanghai Petrochemical has shut one 100,000 mt/year low density polyethylene line for 28 days of maintenance since November 25, said a company source. In addition, JYD reported that the company's two PP lines, with a total capacity of 400,000 mt/year, have been shut since November 15 and start up dates have not been fixed. Sinopec's Maoming Company will shut its No. 1 steam cracker, which can produce 380,000 mt/year of ethylene, on December 1 for a 36-day turnaround. This will affect its 170,000 mt/year No. 1 PP line at the same complex, which will also be taken offline on the same day. The company's 360,000 mt/year LDPE line will also be shut November 26 for 41 days of maintenance, while its 220,000 mt/year linear low density polyethylene line will be shut on December 1, according to a company source and JYD reports. Local media also reported that Sinopec Guangzhou is expected to shut its steam cracker and its 140,000 mt/year PP unit late November for 40 days of maintenance. --Kimitsu Yogachi, kimitsu_yogachi@platts.comSimilar stories appear in Polymerscan. See more information at http://www.platts.com/Products/polymerscan