An oyster industry expected to be in ¡®reflective profit¡¯ thanks to ¡®Chinese Gass Chaos¡¯
Yang Ji Yun | galileo@ | 2017-12-15 09:42:57

[Digital Times, Yang Ji-yoon] Korean petrochemical companies, which have seen profits from Hurricane Hurricane in mid-August, are expected to see another profit at the end of this year.

It is due to the gas disruption in the northern coal-burning bans of Chinese authorities that chemical companies in China have been shut down. Domestic demand is expected to recover by the end of the year and the end of the year, which is the traditional low-demand season, as international oil prices surpassed USD 50 / bbl.

BASF, a multinational chemical company, recently stopped operating a 400,000-ton methylene diphenyl diisocyanate (MDI) plant in Sichuan, China, and five chemical plants in southwest China have also stopped operating, the 14-day petrochemical industry said. Sichuan-based petrochemical companies, including BASF, are expected to halt operations or significantly reduce production by March next year, according to government orders.

The Chinese government is throwing its arms to reduce air pollutants and spilling fire into the local chemical industry. LNG supply is getting worse after 28 cities in the northern region prohibit coal heating. In fact, LNG prices in China have risen by an average of 86% for three consecutive months from early September to early this month. In the northern region, LNG prices doubled for two weeks from mid-November. As the domestic demand has not been met, the Chinese government has restricted industrial LNG supply.

The measure is likely to include a Chinese petrochemical company that makes ethylene based on coal, MDI, thermoplastic additive for polyurethane, adhesives and coating materials, and chemical fertilizer makers. In particular, ethylene extracted from coal-based plants is mainly used to make polyvinyl chloride (PVC), so PVC-related companies are also expected to be hit hard.

Meanwhile, the domestic petrochemical industry is expected to benefit directly and indirectly from the gas crisis in China. In general, the petrochemical sector is in the off season from December to February. The price of petroleum products is expected to remain low even though the price of petrochemical products should fall after the global gas price hovering above 50 dollars per barrel for more than a month.

Some of the industry`s prospects are that exports of domestic petrochemical companies will increase due to the Chinese gas crisis.

An expert from the petrochemical industry said, "Although there is no concrete move to increase exports to China, the price of petrochemical products in Asia remains unchanged due to anticipation of rebound profits." In Korea, petrochemicals with a naphtha cracking facility (NCC) Companies and PVC manufacturers will be the biggest beneficiaries."


By Yang Ji Yun galileo@


[ copyright ¨Ï The Digitaltimes ]