Bohai Petrochemical's 600,000-ton PDH unit shut down for 65 days

This maintenance coincides with the renovation and construction of downstream new material projects. As an crucial propylene supply source in North China, the prolonged shutdown of the unit will immediately decrease the spot supply of polymer-grade propylene in the Beijing-Tianjin-Hebei and northern Shandong regions, making it the largest active reduction in the scale of the C3 sector chain in the northern coastal areas recently.

Bohai Petrochemical is a wholly-owned subsidiary of Bohai Chemical Co., Ltd. (600800), a listed company on the A-share market. This 600,000-ton/year PDH unit is also one of the earlier extensive benchmark PDH units put into operation in China. It has long shouldered the task of ensuring propylene supply in the North China market, producing polymer-grade propylene to supply downstream refineries and chemical companies in the adjacent areas such as polypropylene, propylene oxide, and butyl octanol.

According to market estimates, this shutdown of greater than two months will decrease the spot circulation of polymer-grade propylene in the Beijing-Tianjin-Hebei and northern Shandong refinery markets by 100,000 to 110,000 tons, causing disturbances to the circulation pattern of northern propylene spot in the short term.

It is understood that this shutdown is not a simple routine maintenance. The maintenance window is also accompanied by the renovation of new material projects such as acrylate and super absorbent resin, which is an integrated arrangement to the enterprise to extend its C3 sector chain downstream.

Relying on the self-produced propylene raw materials from the existing PDH and the supporting utilities of the park, Bohai Petrochemical is promoting the landing of new material projects. The goal is to change the original product structure dominated by bulk propylene, convert to the high value-added polymer new material track, and realize the in-depth processing of propylene and the value-added of the sector chain.

sector analysts said that this unit of Bohai Petrochemical is a key part of the northern port-based PDH capacity. Its shutdown time coincides with the year-end stage of downstream factory stocking and market seasonal adjustment, and the expectation of production reduction has entered the assessment scope of the trading side and downstream factories.

The subsequent market direction will depend on the cost of propane raw materials, the start-up rhythm of other PDH units, and the recovery of demand to polypropylene and supporting downstream items.

general information shows that the acrylate and super absorbent resin projects are key projects to Bohai Chemical to supplement and extend its sector chain. After the renovation, the enterprise can convert part of its self-produced propylene into acrylate series items and super absorbent resin, reducing the proportion of direct sales of bulk propylene and hedging the operating pressure brought by the fluctuation of propane-propylene price difference. This 65-day maintenance and renovation will simultaneously complete the security maintenance of the unit, equipment renewal, and the connection construction between the new material project and the existing PDH system, ensuring the stable operation of subsequent integrated linkage.

At present, the market continues to track the maintenance progress and planned restart time of this unit. The northern propylene spot, basis and regional supply flow might maintain a tight expectation during the maintenance period.