WELCOME TO WUXI LONGSHINE TEXTILE CO., LTD.
China domestic petrochemical plants’ HDPE pipe production ratio was spiraling up since 2017
You are here: HOME » NEWS » China domestic petrochemical plants’ HDPE pipe production ratio was spiraling up since 2017

China domestic petrochemical plants’ HDPE pipe production ratio was spiraling up since 2017

Views:3     Author:Site Editor     Publish Time: 2019-08-14      Origin:Site

As shown in the following chart, starting from 2017, China domestic petrochemical plants’ HDPE pipe production ratio was spiraling up since 2017. In 2017 and prior years, the production ratio of domestic petrochemical suppliers for HDPE pipe was usually around 10%. In the third quarter of 2017, due to the strengthening the environmental protection policy, a large number of infrastructure projects, such as coal-to-gas and sewage treatment were going on, and the proportion of HDPE pipes was increased. The ratio reached its peak in 2018 over 20%.



But demand waned since the second half of 2018, and the market became saturated. Prices of HDPE pipe fell continuously, and kept breaking down the bottom place in 2019. So players are not confident to say it is near the bottom even when prices have fallen below 9,000yaun/mt.

Despite of the long-lasting bear market, the market will finally find its bottom place. There are two things worth paying attention to in the next stage, that may accelerate the bottoming process of HDPE pipes.

First, the turnaround schedules of petrochemical plants. According to current knowledge, there are so far three major HDPE pipe plants to be shut in the third quarter:
- Yan’an Energy & Chemical schedules a 45-day turnaround since end-Aug for its 450kt/year HDPE plant. The company mainly produces the low-grade products, HDPE 23050 (pipe 100) and HDOE 43049 (pipe 80) and the prices are almost the lowest in all HDPE products.
- PetroChina Dushanzi Petrochemical has shut its 300kt/year HDPE plant and 600kt/year HDPE/LLDPE swing plant since mid-Jul for around two months. The 300kt/year HDPE plant mainly yields pipe 100 HDPE N3000 etc., and the two swing production lines (total of 600kt/year) produces pipe 100 HDPE 4808 etc.

These two plants will cut down HDPE pipe supply overall in August and September and will lead to a significant reduction in market supply.

CompanyPlantCapacity (kt/year)HDPE pipe variety
Yan'an Energy & ChemicalHDPE45043049/23050
PetroChina Dushanzi PCHDPE300N3000, etc.
FDPE6004808, etc.

Second, demand is steady from infrastructure projects in the second half of the year, although its current performance is not good as expected. In addition, downstream plants in North China will begin to replenish feedstock since August for the production work in peak season. Even there is no new growth point, these part of traditional demand will ensure market. Once the restock starts, HDPE pipe market will stabilize and strengthen.

In summary, the current domestic HDPE pipe market is still in a bear market, but the overall price is already at a historical low level and downside space is getting smaller and smaller. In the second half of the year, HDPE plants’ turnaround schedules and gradually recovering demand will all support the market. It will not take too long for HDPE pipe to recover. HDPE pipe is one of the PE varieties worthy of attention in the second half of 2019.


QUICK LINK

YARN

POLYESTER STAPLE FIBER

LEAVEMASSAGE

COPYRIGHT ©  WUXI LONGSHINE TEXTILE CO., LTD ALL RIGHTS RESERVED