China’s April PDH Operating Rates Drop Amid Feedstock Shortages
Chinese propane dehydrogenation (PDH) units’ average operating rate fell to 55% in April to date, down from 64% in March and February, due to difficulties in securing propane feedstock, analysts said.
Plants have been facing difficulties since the start of the war, which has disrupted Middle Eastern supply. The recent U.S. blockade of Iranian ports has exacerbated the situation, as China relies heavily on Iranian cargoes. Data from Vortexa showed that Iran exported a total of 11.35 million metric tons of LPG last year, with 9.58 million metric tons, or 84.4%, heading to China. Its import volumes were close to 1 million mt of Iranian LPG each month. The same data showed monthly volumes are set to drop significantly this year, with April and May imports estimated at 692,400 mt and 473,700 mt, respectively, following the U.S. blockade.
“Many operators across the country have shut their plants for maintenance due to a lack of feedstock. Some only managed to secure less than half a cargo in March for April, which can only support operations for less than a week,” a trade source said.
Fujian Meide No. 1 (900,000 mt/year), Quanzhou Guoheng (660,000 mt/year), Hebei Haiwei (500,000 mt/year) and Qingdao Jinneng No. 1 (900,000 mt/year) shut their units last week, with no confirmed restart dates. Sinochem Ruiheng (600,000 mt/year) is also running out of propane and plans to undergo maintenance from late April to May 5, according to sources.
The drop in China’s PDH operating rate also comes amid a quiet market, with participants retreating to the sidelines due to ongoing uncertainty. The physical trading window saw no bids, offers or deals for three consecutive days since last Thursday. There was also a string of tender cancellations last week, as importers received no offers amid the supply shortage, with sellers unwilling to offer cargoes in the event of escalating tensions.
Analysts expect China’s PDH operating rates in May to average the high-50% range, as some plants return from maintenance.
Reporting by Cheryl Lee, clee@opisnet.com ; Editing by Mei-Hwen Wong