The shutdown wave of 2017 has not yet subsided, and the scale of shutdowns in 2018 could be even greater
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Since the second half of 2017, Shandong has closed around 600 chemical manufacturing enterprises that shifted to other types of production, and ordered more than 2,000 such enterprises to suspend operations for rectification. As a major chemical industry province in China, Shandong has more than 9,000 chemical enterprises, of which 37% are enterprises above a certain scale. Two-thirds of these chemical plants contribute only 3% to the overall output of the industry. At the end of December last year, when the central environmental inspection team submitted its findings to Shandong Province, it pointed out that the chemical industry in that province was developing in an unregulated manner; numerous projects were constructed in violation of regulations, resulting in severe environmental pollution and risks. The Marine Chemical Industry Park in Houzhen, Shouguang, Weifang City, the Lushan Chemical Industry Park in Yishui, Linyi City, and the Binzhou Industrial Park have constructed multiple chemical projects in violation of the overall urban planning regulations. In the first half of 2017, the Safety Supervision Bureau of Shandong Province issued a notice stating that the safety production licenses of 169 hazardous chemicals manufacturing enterprises were revoked in accordance with the law. Recently, the Shandong Provincial Work Safety Supervision Bureau issued another announcement stating that, in accordance with the Regulations on Work Safety Licenses (Decree No. 397 of the State Council) and the Measures for the Administration of Work Safety Licenses for Hazardous Chemicals Production Enterprises (Order No. 41 of the Work Safety Supervision Administration), the work safety licenses of 193 hazardous chemicals production enterprises were revoked in the second half of 2017 in accordance with the law. To date, Shandong, a major chemical-producing province, has revoked the safety production licenses of 362 hazardous chemicals manufacturing enterprises in 2017. A wave of shutdowns in the chemical industry is underway. According to the \"Overall Work Plan for the Special Action on the Safe Production and Transformation and Upgrading of the Chemical Industry in Shandong Province,\" the transformation and upgrading of this industry is divided into three phases: from June 2017 to the end of the year, an emergency campaign was launched to conduct thorough inspections, carry out rapid rectifications, and enforce strict regulations across the province, with the aim of firmly preventing the occurrence of various accidents ； From July 2017 to June 2020, efforts were made to drive the transformation and upgrading of the chemical industry, with a view to accelerating the transformation and upgrading of Shandong’s chemical industry as well as the shift from old to new drivers of economic growth ； From July 2020 to June 2022, a standardized and institutionalized long-term mechanism was established to develop the chemical industry into an important pillar industry that is safe, clean, green, low-carbon, integrated, and innovative. At the end of June 2017, Shandong Province launched a special campaign to promote the safety and transformation of the chemical industry, during which approximately 103,000 safety hazards in chemical enterprises were identified. Shandong Province stated that it will systematically phase out, shut down, or restructure those enterprises that are illegal or fail to meet the required standards, striving to complete all such closures within two years. Regarding the impact of the wave of shutdowns in chemical plants in Shandong Province, experts say that it has led to a certain degree of shortage for some products, resulting in higher prices for those products. However, \"overall, the impact is limited, and further observation is needed.\" Environmental protection officials noted that some downstream products have seen reduced production, and that compared to the upstream products in the chemical industry, this wave of production stops has a greater impact on the downstream end-users in the chemical sector. For example, there has been a certain degree of production reduction in industries such as propylene oxide produced by the chlorohydrin method, butyl octyl alcohol, and plastic weaving. In the olefin industry chain, the upstream manufacturers are mainly refineries and large-scale coal chemical enterprises. These enterprises are large in scale, have a high added value per unit of product, and have a solid foundation in environmental protection; therefore, the wave of production shutdowns has a limited impact on olefin manufacturers. However, as industries such as propylene oxide produced via the chlorohydrin process, butyl octyl alcohol, and plastic weaving have seen a certain degree of production reduction, the demand for olefins has decreased, which will create some inventory pressure. “Just in terms of synthetic rubber, the wave of production stops has not had a significant impact on rubber products. ”Industry experts say that the wave of production halts could lead to short-term supply shortages for certain grades of rubber. Since rubber products are controlled by the two major oil-selling companies, as the chemical plants in Shandong ceased production, rubber factories in other regions began to increase their production capacity.
It is hoped that there will be plans and standards for limiting or stopping production, rather than adopting a one-size-fits-all approach indiscriminately
High pressure regarding safety and environmental protection will become the norm.
There are a large number of small chemical enterprises in Shandong Province; chemical plants can be found almost everywhere. The enterprises that were shut down this time were mainly those with low management standards, severe pollution problems, and no environmental protection facilities. As a result, some large coal-based chemical enterprises saw a significant increase in their profits, while those with outdated technology and high costs faced bankruptcy. The new fine chemical enterprises, aside from the impact of production restrictions, also enjoyed strong sales performance. In general, it seems that the small and medium-sized enterprises with severe pollution, outdated technology, and weak competitiveness were the ones that were shut down; most of the employees in these enterprises were local farmers who worked both as laborers and in farming. After the implementation of this measure, it will, to a certain extent, promote technological advancement in chemical enterprises, increase the proportion of environmental protection facilities in use, and at the same time enhance the competitiveness and profitability of key chemical enterprises!
Only by eliminating the outdated can technology progress
Focus on the major issues and ignore the minor ones; energy consumption must be reduced. Only through strict measures can we once again see green landscapes and blue skies. Small workshops with high energy consumption harm both the people and the country
I’ve never been to small factories; it seems that their management is rather backward
It’s better to stop them all. As a capital- and technology-intensive industry with high risks, the entry barriers for the chemical sector must continue to rise. Only graduates with a degree in chemical engineering are truly valuable; only then can this industry have a promising future.