Dalian Fujia Petrochemical Co Ltd. continues operating its 700,000 tpa paraxylene plant normally despite an order by the local government to close the plant on concerns of a toxic spill scare. Largely peaceful and white-collar protesters have demanded a clear timetable for moving the plant, with some refusing to leave until a plan was ready. However, impending closure of China's Fujia Dahua worries petchem industry, as per Platts. However, players believe that closure or relocation of Fujia Dahua would have severe repercussions across the industry.
If the government shuts Fujia Dahua because of its proximity to residential areas, then almost all the petrochemical plants in China will have to be shut, as they are built close to the city.
Fujia is a conglomerate that is also involved in methanol-to-olefins projects and has taken huge amount of bank loans from state banks. If the government shuts the PX plant (the key money maker in the market now), the group could be saddled with billions of dollars of debt and that could cripple Chinese financial institutions. In addition, relocation would be a bigger task than building from scratch.