Shandong Aims to Resume Butadiene Production in China by December

Shandong, a prominent petrochemical manufacturer in China, is gearing up to recommence butadiene production at its facility in Shouguang, located in Shandong Province. The anticipated restart is scheduled for December, following a temporary shutdown for scheduled maintenance that commenced on November 11. This production facility boasts an annual butadiene production capacity of 100 thousand tons.

This development comes in the wake of Sinopec Zhenhai Refining & Chemical Company (ZRCC), a subsidiary of the globally influential energy and chemical giant China's Sinopec Corp., temporarily halting butadiene production at its plant in Ningbo, situated in Zhejiang Province, China. The Ningbo plant, with an annual butadiene production capacity of 165 thousand tons, initiated scheduled maintenance on February 26, with the downtime expected to extend until mid-May.

Butadiene holds significant importance as a primary raw material in the manufacture of acrylonitrile butadiene styrene (ABS). South Korean suppliers dominated this period, contributing 56% (12.5 thousand tons), a slight increase from the 54% (10.6 thousand tons) recorded in the same timeframe in 2022. Following closely are imports from China, constituting 30% (6.6 thousand tons) from January to August 2023. Imports from Taiwan secured the third position, accounting for 13% (3 thousand tons).

Shandong's strategic decision to resume butadiene production aligns with the growing demand for ABS and underscores the significance of a stable supply chain in the petrochemical industry. As ABS imports register an upward trajectory, it becomes imperative for key players such as Shandong to ensure a timely and efficient resumption of production to meet market demands.

The company, known for its pivotal role in the Chinese petrochemical landscape, specializes in the production of a diverse range of petrochemical products derived from coal. These include but are not limited to caustic soda, hydrogen peroxide, methanol, and chlorine. By resuming butadiene production, Shandong not only contributes to the stability of the ABS supply chain but also reaffirms its commitment to fulfilling the diverse needs of the petrochemical market.

In the broader context, the temporary halts for scheduled maintenance at major butadiene production facilities, including those of Sinopec Zhenhai Refining & Chemical Company and Shandong Shouguang Luqing Petrochemical, reflect the industry's dedication to ensuring operational efficiency, product quality, and compliance with safety standards. These strategic pauses, though temporary, play a crucial role in sustaining long-term production capabilities and meeting the evolving demands of the petrochemical sector.

As Shandong charts its course towards the resumption of butadiene production, the industry will be closely watching how this decision contributes to the overall dynamics of the ABS market and the broader petrochemical landscape. The interplay of supply and demand, coupled with the geopolitical and economic factors influencing the industry, will continue to shape the trajectory of petrochemical production and trade in the coming months.