How Has the “Dual Control” Policy Impacted PO Market?

PU daily, Shanghai

In mid-September, the Circular on Progress in Achieving the Targets of Controlling Energy Consumption and Intensity in Different Provinces in H1 2021, issued by National Development and Reform Commission, drew considerable attention on the social media. Jiangsu and Shandong, two major provinces producing propylene oxide and downstream products, are naturally in the crosshairs of the policy. In this context, a red light for Jiangsu due to its slow progress in achieving the targets of controlling energy consumption and intensity (“dual control” policy) and restriction on power consumption became hot topics.

Starting from September 16, all industrial enterprises in Taizhou suspended production, with 90% of firms in Jiangsu affected by the “dual control” policy. Plants have been completely shut in Nantong Yangkou Chemical Industrial Park, Taixing Economic Development Chemical Industrial Park, Taixing Economic Development Zone, Huaian Salinization New Materials Industrial Park and Yancheng Dafeng Port Economic Development Zone. Manufacturers in other industrial parks have successively lowered their production loads to about 70%. The following three manufacturers, producing PO or polyether polyols, are among the firms that have shut their plants.

At the same time, power consumption is restricted in Zibo, Dongying, Binzhou and other regions in Shandong Province.
PO capacities in Shandong and Jiangsu account for 44.6% and 12.4% of the total capacity in China, respectively. Due to the “dual control” policy and restriction on power consumption, capacities shut in Shandong make up 85% of the total capacity in the province, and capacities in Jiangsu are all shut. Operating rates of different PO manufacturers for last week: