Electricity rationing in East and Central China restrains petrochem operations

05-Aug-10
Provinces in East and Central China are faced with electricity rationing resulting in operation cutbacks at processors and reduced demand for petrochemicals, as per Platts. As per a statement released by the National Development and Reform Commission, China has set a new record in electricity usage in H2-July, with electricity usage hitting an all time high of 13.63 billion MW on July 30th. Provinces of Jiangsu, Henan, Hunan, Sichuan, Chongqing, Shaanxi, Tianjin in East China and mid-China were the regions that clocked the highest electricity usage. The high consumption levels are expected to continue as temperatures in these regions are forecast to remain at an average of 39-40 degrees Celsius in the summer. Record high electricity consumption levels have resulted in shortages all throughout China, leading to cutbacks in operations, negatively impacting demand for certain petrochemicals. Chongqing Pengwei has, from the end of July, declared force majeure on its purified terephthalic acid supplies from its 900,000 tpa plant at Chongqing after a power outage. Several polyester factories such as Nanfang Polyester (400,000 tpa filament yarn) and Zhejiang Jiabao (560,000 tpa polyester) are staggering the shutdown of polyester lines as they wrestle with cutbacks in electricity supplies. Local media also reported that major polyester factories in the Zhejiang province received notification to take turns to shut their units from July to September 15, while several others in Shaoxing and Xiaoshan were ordered to shut or reduce operations by at least 20%.
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