Hanhwa Chemical’s Chinese PVC business in `fancy revival`
Yang Ji Yun | galileo@ | 2017-09-22 11:29:25
[Digital Times, Yang Ji-yoon] The Chinese polyvinyl chloride (PVC) business, which was so called ‘Ugly Duck’ of Hanwha Chemical, is celebrating its revival. The Chinese government`s commitment to environmental regulation and industrial restructuring is solid, and raw material prices are expected to remain stable for the time being.
According to the securities and petrochemical industry on September 21, Hanwha Chemical Ningbo Corporation is expected to record a profit this year. Hanwha Chemical has not disclose individual earnings of Ningbo Corporation but estimated that the securities industry surpassed the annual operating profit of KRW 16 billion last year with a surplus of KRW 18 billion in the first half of the year. Ningbo is a PVC factory built by Hanwha Chemical in Ningbo, Zhejiang Province, China, with a investment of $ 340 million (about 385 billion won), with an annual production capacity of 320,000 tons. PVC is a general purpose petrochemical used in pipes, chassis and flooring. Ethylene, a basic raw material for PVC, is divided into crude oil and coal. Hanwha Chemical products are based on crude oil. In contrast, Chinese petrochemical companies mainly produce coal-based PVC products.
Hanwha Chemical Ningbo corporation transformation has been led by changes in the internal and external environment. Ningbo Corporation has recorded chronic people for four consecutive years since its commercial production in 2011. The price of crude oil, which is more than USD 100 per barrel, is largely behind price competitiveness compared to coal-based PVC. But it has been a turning point since 2013. The international oil price has been brisk and the environment has been created in which coal can no longer dominate the price.
The fact that the Chinese government is pushing for structural reforms emphasizing qualitative growth rather than quantity has also served as an excuse. This is because the Chinese government is increasing its coal prices while strengthening coal industry restructuring and environmental regulations. Coal-based PVC was not only inferior in quality but also in price, but now its price competitiveness has dropped.
An industry expert said, "As the situation of the environmental regulation, restructuring and storage of the Chinese government continues, we expect the production activity of the local PVC companies to be further depressed. Production in China is decreasing, but in the case of India, the demand for PVC is growing, so the outlook for crude oil-based products is bright. "
By Yang Ji Yun galileo@
[ copyright ⓒ The Digitaltimes ]
According to the securities and petrochemical industry on September 21, Hanwha Chemical Ningbo Corporation is expected to record a profit this year. Hanwha Chemical has not disclose individual earnings of Ningbo Corporation but estimated that the securities industry surpassed the annual operating profit of KRW 16 billion last year with a surplus of KRW 18 billion in the first half of the year. Ningbo is a PVC factory built by Hanwha Chemical in Ningbo, Zhejiang Province, China, with a investment of $ 340 million (about 385 billion won), with an annual production capacity of 320,000 tons. PVC is a general purpose petrochemical used in pipes, chassis and flooring. Ethylene, a basic raw material for PVC, is divided into crude oil and coal. Hanwha Chemical products are based on crude oil. In contrast, Chinese petrochemical companies mainly produce coal-based PVC products.
Hanwha Chemical Ningbo corporation transformation has been led by changes in the internal and external environment. Ningbo Corporation has recorded chronic people for four consecutive years since its commercial production in 2011. The price of crude oil, which is more than USD 100 per barrel, is largely behind price competitiveness compared to coal-based PVC. But it has been a turning point since 2013. The international oil price has been brisk and the environment has been created in which coal can no longer dominate the price.
The fact that the Chinese government is pushing for structural reforms emphasizing qualitative growth rather than quantity has also served as an excuse. This is because the Chinese government is increasing its coal prices while strengthening coal industry restructuring and environmental regulations. Coal-based PVC was not only inferior in quality but also in price, but now its price competitiveness has dropped.
An industry expert said, "As the situation of the environmental regulation, restructuring and storage of the Chinese government continues, we expect the production activity of the local PVC companies to be further depressed. Production in China is decreasing, but in the case of India, the demand for PVC is growing, so the outlook for crude oil-based products is bright. "
By Yang Ji Yun galileo@