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CHINA DATA: PDH plants' May average run rate hits year-to-date high at 88%

Singapore (Platts)--13 Jun 2018 1013 pm EDT/213 GMT


China's propane dehydrogenation plants raised their averaged operating rate to 88% in May from 84% in April, according to S&P Global Platts calculations based on data provided by JLC, a Beijing-based information provider.

This was the highest run rate to date in 2018, and could be attributed to no maintenance being undertaken at PDH plants in May, Platts calculations showed.

The average rate covers eight plants in China that have a combined propylene production capacity of 4.61 million mt/year and can use up to 5.53 million mt/year of propane as feedstock at full operating rates.

None of the PDH plants reported maintenance in May, and most kept their run rates broadly unchanged from April, according to the JLC data.

However, Zhejiang Satellite Petrochemical in eastern China raised the operating rate of its PDH plant to 93% in May from 61% in April, which was seen as the main reason for the rise in the overall rate.

The company resumed normal operations in May after unplanned maintenance at its 450,000 mt/year PDH facility over April 13-19, Platts reported earlier.

For June, Yantai Wanhua plans to shut its 750,000 mt/year PDH facility in eastern Shandong province for a month of scheduled maintenance from this weekend, according to a source with the company.

This is expected to lower the overall PDH plant average operating rate in June, market sources said.

PROCESSING MARGINS NARROW AS PROPANE COSTS RISE

The PDH plants' processing margins were estimated to have edged down to to Yuan 1,985/mt ($309.40/mt) in May from Yuan 2,060/mt in April due to a rise in the cost of imported propane, according to Platts calculations.

However, the margin was still wide enough for domestic PDH plants to maintain high run rates, market sources noted.

Saudi Aramco set its May Contract Price for propane at $500/mt on a FOB basis, up $25/mt from the month before.

Refrigerated propane cargoes on a delivered basis to East China were estimated to average $563/mt in May, up $75/mt from April, Platts calculations showed.

China's PDH plants typically secure half their propane requirements under term contracts and the rest in the physical spot market.

It takes around 1.2 mt of propane to produce 1 mt of propylene, and the processing cost for PDH plants in China is estimated at around Yuan 1,500/mt by market sources.

As a result, PDH plants' propylene producing costs in May were estimated at around Yuan 6,316/mt after factoring in taxes, fees and processing costs, up Yuan 431/mt from April.

Chinese domestic propylene traded at an average of Yuan 8,300/mt in the east and north in May, up Yuan 356/mt from April, according to JLC data.

As a result, Platts estimates PDH plants in China had a theoretical processing margin of Yuan 1,985/mt in May, down 4% month on month.

--Staff, newsdesk@spglobal.com

--Edited by Wendy Wells, wendy.wells@spglobal.com




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