Japan earthquake causes shortage of propylene supply and demand

On March 11th, Japan’s 9.0-magnitude earthquake caused destruction of its domestic refinery facilities, closure of refineries, and changes in the crude oil market and the petrochemical feedstock market. Market analysts have analyzed that although rising crude oil prices have been restrained by Japan’s decline in demand for crude oil, the propylene market in the Asia Pacific region and China is unlikely to fall. It may even be the opposite of the crude oil market, and the possibility of continued growth. More sexual.

Propylene prices in Asian markets have continued to rise this year. In January, the average price of propylene in Southeast Asia was 1,242 U.S. dollars (ton price, the same below). The average price in February was 1,360 U.S. dollars, up by 118 dollars from January; the price of Southeast Asia propylene in the middle of March after the Japan earthquake was 1,452 U.S. dollars, compared with February. It's also up 92 dollars. Japan is a large producer of propylene in Asia. The closure of Japanese refineries will increase the supply and demand of global olefins, especially propylene, and push up the price of propylene, which will increase the cost of imported propylene in China.

The earthquake in Japan caused the shutdown of refineries in Kanagawa, Ibaraki and other areas. Maruzen Oil and Mitsui Chemicals shut down urgently. The refinery of Kemos refinery in the city of Shihara, Chiba Prefecture exploded due to the rupture of the pipe rack of the gas storage tank and caused LNG to leak out. It is expected to take 2 months to repair. The Mitsui propylene plant with an annual output of 617,000 tons in Chiba Prefecture has been shut down due to this impact. In addition, the output of an output of 374,000 tons of propylene per year has also been shut down. In 2011, Japan's propylene production reduction was a foregone conclusion.

The output of Japan’s major petrochemical products ranks among the top in the world, of which propylene production capacity was 7.71 million tons in 2009, accounting for 7.69% of global production capacity. Japan is China's main importer of propylene. In 2010, China imported 348,000 tons of propylene from Japan, which accounted for about 23% of China's total propylene imports.

In the event that the Japanese propylene production plant was shut down due to the earthquake and propylene resources were insufficient, some market participants would enter the market for speculation. Exporters from Taiwan and South Korea would also take the opportunity to raise the export price of propylene, and the price of propylene would also increase. Reasonable.

At the same time, China has adopted a proactive fiscal policy, the construction of affordable housing projects, and the construction of agricultural and rural water conservancy facilities. This is a substantial benefit for plastic products. In addition, the number of plastics used in automobiles and home appliances in China has increased rapidly, and the demand for polypropylene has been increasing, resulting in the continuous rise in the price of plastics in the near future. The role of the industry chain will also lead to a rise in the price of propylene.

Because Japan's polypropylene production capacity accounts for 5.5% of the world's total, and its export volume accounts for 4% of the world's total, it is expected that the prices of polypropylene at home and abroad will also increase slightly.