Short supply unlikely to largely impact spot market prices due to the lull season

Asian polypropylene supply is expected to be tight between December and January, but the short supply is unlikely create a huge impact on spot market prices due to the lull season, as per Platts. Business has been slow this week on the back of tightened liquidity in China as well as measures to curb speculative trading. The tightness comes as some PP production facilities in Asia have been shut, and two Middle Eastern producers have also shut their plants. In China, Sinopec has shut a few lines on the back of the ongoing diesel shortage there. Refineries have been told to focus on producing more diesel and this has resulted in less naphtha being available to be cracked into propylene and ethylene. Zhenhai Refining & Chemical Company will shut its 300,000 tpa PP line over December 4-20; Shanghai Petrochemical's 400,000 tpa plant has been shut since November 15 and is expected to restart only in January; Sinopec's Maoming Company shut its 170,000 tpa PP line on December 1 for a 36-day turnaround. Thailand's Siam Cement Group is operating its PP plants at an overall capacity of around 70% due to a series of maintenance shutdowns, in line with the cracker shutdown at its feedstock supplier Rayong Olefins Company, said a company source. Malaysia's Titan Chemicals is also running its PP units at around 80% capacity due to propylene constraints as well as technical issues, according to a company source. Oman Polypropylene and Saudi Arabia's Advanced Petrochemicals Company have both shut their plants. Last week, Oman PP was forced to idle its 340,000 tpa polypropylene plant at Sohar for two weeks, due to feedstock shortage. The company faced a disruption in propylene supply from its supplier, Oman Refineries and Petrochemicals Company, which had shut its 75,260 b/d residual fluid catalytic cracker due to mechanical issues. Advanced Petrochemical Company shut its 450,000 tpa PP plant at Al-Jubail Monday on technical issues and it is expected to be shut for 10 days. A company source confirmed that it was not due to feedstock issues, but did not give further information about the problem.
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