China’s month-long environmental inspections of five provinces housing industrial hubs have prompted independent refineries and some petrochemical plants to either reduce operating rates or shut production.
On 25 August-2 September, the country’s environment watchdog – the Ministry of Environment and Ecology (MEE) – dispatched working groups to Jilin (northeast), Shandong (east), Hubei (central), Guangdong (south) and Sichuan (southwest), to check on the provinces’ compliance with environmental regulations.
China’s second round of crackdown on non-compliant industries across more than 30 provinces started in July 2019.
Petrochemicals are categorized among high-polluting industries.
Several independent refineries in the eastern province of Shandong have cut run rates by as much as 40%, while two of them with a combined capacity of 4.2m tonnes/year have shut operation.
On the other hand, major refineries operated by Chinese petrochemical giant Sinopec – such as those in Maoming, Zhanjiang, Zibo, Wuhan – continue normal operations.
Provincial environment authorities typically order closure of polluting or high-emission factories ahead of the arrival of MEE inspectors.
For example, Zibo-based Jianlan Chemical was ordered to shut its two 2-ethylhexanol (2-EH) plants in Shandong on 24 August, two days before government inspectors arrived, a company source said.
The plants, which have a combined capacity of 210,000 tonne/year, will not be restarted until the month-long inspection is over, the source said.
Production of propylene oxide (PO), epoxy resin, acetic acid and downstream, fertilizer, coal-based methanol, among others, will all be affected, industry sources said.
In Shandong, a number of PO producers have reduced operating loads by an average of 20-30% since last week, and may not resume normal operations in the short term, industry sources said, as the sector faces a major sewage-disposal issue.
Coal-chemical plants, particularly coking facilities, have mostly reduced run rates, market sources said.
There is a tendency for some factories to under-report data on production and actual capacity to government authorities, to meet emission requirements, industry sources said.
The MEE cited a fertilizer producer in Shandong which underreported its ammonia and urea capacities by a third; while noting that in Jilin, Guangdong, Sichuan and Hubei, illegal disposals of wastes and sewages are polluting water and land.
In view of this, more rigorous cross-data checks are expected in the new round of inspections, with those found in violation facing heavy fines.
“Many tire producers have to shut recently because of the environment issue and this has caused sharp price fall of rubber,” said Zhang Junfeng, senior analyst at brokerage China Merchant Securities.
Natural rubber prices at the Shanghai Futures Exchange have shed 2% in the first eight days of September.
Focus article by Fanny Zhang
BASF will build a commercial scale battery recycling black mass plant in Schwarzheide, Germany. This investment strengthens BASF’s cathode active materials (CAM) production and recycling hub in Schwarzheide. The site is an ideal location for the build-up of battery recycling activities given the presence of many EV car manufacturers and cell producers in Central Europe.
Clariant says it is reducing its number of businesses from five to three, by merging units, under a reorganization that is in line with the company’s purpose-led strategy and cultural transformation. The moves will position Clariant for long-term sustainable growth, the company says.
Chemicals & plastics industry has the most diversified end-use market across all manufacturing industries. The industry returned to growth in 2021 but a supply chain crunch prevented it from becoming stronger. The market is likely to stabilize in the second half of 2022 with a supply-demand balance.