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Dongguan Grand Resources shuts all PDH and PP units for two weeks amid margin pressureMarket sources said the producer moved to halt operations after margins became unsustainably weak, with both PDH and downstream PP units reportedly facing losses at current feedstock and product spreads |
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Dongguan Grand Resources Science & Technology Co. Ltd. has taken all PDH and PP lines offline, with the outage expected to last around two weeks. Market sources said the producer moved to halt operations after margins became unsustainably weak, with both PDH and downstream PP units reportedly facing losses at current feedstock and product spreads.
|
Phase |
Unit |
Capacity (tons/year) |
|
Phase I |
PDH |
600,000 |
|
PP 1 |
300,000 |
|
|
PP 2 |
300,000 |
|
|
Phase II |
PDH |
600,000 |
|
PP 1 |
300,000 |
|
|
PP 2 |
300,000 |
|
|
Total |
PDH |
1.2 million |
|
PP |
1.2 million |
The shutdown removes a significant volume from the market—1.2 million tons/year of PDH capacity and an equivalent 1.2 million tons/year of PP capacity across four lines. While the immediate impact may lend marginal support to domestic PP sentiment, players remain cautious, noting that demand has yet to show meaningful improvement and inventories remain manageable.
According to market participants, other producers operating at thin or negative margins could follow with similar rate cuts or temporary shutdowns if conditions deteriorate further. However, any supply tightness from short-term disruptions will be counterbalanced by China’s aggressive expansion pipeline: nearly 4.5 million tons/year of new PP capacity is scheduled to start up across 12 units in 2026.
As a result, while the outage may provide brief stabilisation, the broader outlook remains shaped by structural oversupply risks and shrinking margins—conditions that continue to pressure producer competitiveness heading into next year.
Written by: Aiman Haikal
Country
China
