Check! Check! Constant inspection! Insufficient supply of imported chemical raw materials!

With the gradual improvement of the domestic epidemic situation, more and more enterprises have returned to work normally, and are gradually making hard efforts to normal operation. According to the data released by the State Development and Reform Commission, at present, except for Hubei, the return rate of key projects is 89.1%. The return to work rate has exceeded 90% in many provinces in China, among which Zhejiang, Jiangsu, Shanghai, Shandong, Guangxi, Chongqing, etc. have reached nearly 100%. However, according to the feedback of many chemical enterprises, the epidemic situation caused by the suspension of production is not smooth, another wave of "production suspension" is rising, what is the reason for them to choose to "slow down" the pace of progress, or even choose to "second production suspension"?


Continuous inspection


According to the feedback of some enterprises, after the resumption of work, a variety of continuous inspections have been carried out for nearly a month, and inspection teams for safety and environmental protection have been in succession. Although they are for the purpose of hidden danger investigation, better safety protection and supervision and warning, the high-frequency and intensive inspections twice a day are still too much for people to bear. Filling in forms and reporting takes up a lot of time and energy every day, which has some impact on production, R & D, sales and other processes.

Henan


On the morning of March 23, mayor Pingdingshan led relevant departments directly under the municipal government to investigate the work safety of some enterprises returning to work. He stressed that we should adhere to the "two hands" of return to work and safety production, implement detailed measures, comprehensively investigate and rectify hidden dangers, firmly adhere to the bottom line of safety, ensure the full return to work of enterprises with safe and stable environment, and promote stable and healthy economic and social development.
On March 20, Zhoukou Safety Committee issued the notice on Further Strengthening the work safety during the period of resumption of work, which reinvigorated the supervision on the work safety of enterprises resumption of work in the whole city, required that "six must and six guarantee" be practically implemented, and put an end to all kinds of work safety accidents.


Hebei


On March 16-20, in accordance with the emergency notice of the office of Hebei Provincial Work Safety Committee on immediately carrying out the major inspection of work safety and production resumption (jianwei ban Chuan [2020] No.7), the action plan of work safety and production law enforcement inspection of work safety resumption of Hebei provincial emergency management department and the instructions of the Secretary of the Party committee of the Department, the non coal mine safety supervision office of Hebei Provincial Department carried out the resumption of work and production in Shijiazhuang Law enforcement inspection has been carried out for work safety.
Changsha


According to Changsha Emergency Management Bureau, in recent days, the city is emergency management system has made every effort to protect the safety of resumption of work and production. In the streets and communities of the whole city, the staff tightened the safety production strings, did not leave any potential safety hazards, and strictly prevented accidents.
Jiangsu


From March 17 to April 30, Wuxi Emergency Management Bureau focused on the special law enforcement inspection and supervision of work safety for the enterprises that have resumed work and production in the city. Huai an City Emergency Management Bureau strengthened service guidance, innovated supervision and service mode, and urged enterprises returning to work to strictly implement the two main responsibilities of epidemic prevention and control and production safety.
The Emergency Management Bureau of Jiangdu District of Yangzhou City focuses on the prevention and control of epidemic situation, the safety of production and the safety of enterprises   return to work.
The law enforcement personnel of Jiangdu safety supervision team went to Shaobo, Yiling, Xiaoji, Wujian and other towns to guide and supervise the safety production service and law enforcement of the enterprises returning to work.

In addition to response to inspection and continuous rectification, can enterprises concentrate on production, catch up with the progress and make up for the losses of the first two months as soon as possible? According to many business executives, this is not the case.


The supply of raw materials imported from upstream is insufficient and the production is limited


With the increasing number of confirmed cases, Europe has become the center of the global epidemic, and the entire European industry has been hit hard. In Europe, there are chemical giants and famous chemical enterprises in Switzerland, such as Amance chemical (polyamide materials), Sika (chemical building materials products), Clariant (catalysts, pigments), and Ekin (Global silicon materials) in Norway. The sales of the whole EU in 2018 accounted for 16% of the world is total, second only to China, and it is one of the important production bases in the global chemical industry.


In addition, novel coronavirus pneumonia and factory shutdown were reported in Europe from the end of February. The novel coronavirus pneumonia (IGM) has been shut down since March, according to media reports, which was affected by the new crown pneumonia epidemic in the early March. A novel coronavirus pneumonia was diagnosed in Ludwigshafen by BASF, a global chemical giant in March 8th. BASF said that the company forbids employees to travel to high-risk areas. If employees return from these areas due to business trips or personal reasons, they must be isolated at home for 14 days and not allowed to work in the factory.
SWS said a contract worker working at prakemin is Dow plant tested positive for covid-19. Dow said it would not close the prakemin plant. Kiran Chawla of wafb informed other chemical plants, including ExxonMobil in Baton Rouge and BASF in gasma. Both ExxonMobil and BASF said they did not plan to close the facility, but took extensive precautions for the foreseeable future.


It is reported that 29% of the EU is chemical exports are external, and the main market for exports is Asia. If the spread of the epidemic leads to large-scale production stoppage in Europe, it will affect the global chemical industry chain and cause industry chain fault. Since February, most European countries have adopted strict traffic control measures, which means that some materials that need to be imported may not arrive on time.   Just at the end of February, Pasteur issued a forecast of supply chain tension. At the same time, BASF Group also warned that the outbreak may lead to the global chemical production growth rate to the lowest level since the financial crisis.
With the supply chain gradually tense, the domestic chemical industry is inevitably affected. According to the paint procurement network, many domestic chemical raw materials are still dependent on import. For example, chlorination titanium dioxide, iron oxide pigment, etc. The demand for high-end titanium dioxide by chlorination process is high in automobile paint industry, which mainly depends on the product import supply of leading enterprises such as tenor and Kemu, and the import products of resin, auxiliary agent and other products used in domestic chemical industry are also more.


Some iron oxide pigments, as well as phthalein blue and YONGGU violet imported from India, are hot imported raw materials. Bayer, a subsidiary of Lansheng, is also an enterprise with more imported pigment products.
A well-known foreign trade enterprise in the chemical industry said that although some domestic enterprises are relatively strict with cost cards and attach great importance to cost management, some high-end industries still value quality and stability, so they prefer the brand reputation of imported goods and the stable quality of products. The shutdown of chemical enterprises in Europe and other places or the reduction of production affected by the epidemic will have a certain impact on the supply of domestic raw materials.
Thirty five countries have declared a state of emergency in the world, namely Italy, Spain, Czech Republic, France, Hungary, Portugal, Slovakia, Switzerland, Austria, Romania, Bulgaria, Latvia, Estonia, Serbia, Cyprus, Poland, Bosnia and Herzegovina, Kazakhstan, Armenia, Palestine, Lebanon, South Korea and the Philippines Bin, El Salvador, the United States, Costa Rica, Argentina, Peru, Panama, Colombia, Venezuela, Guatemala, Sudan, South Africa, Libya, which are bound to have an impact on the import and export of raw materials, many domestic chemical enterprises will face the dilemma of no rice to pot.


Downstream demand may decline significantly


Due to the epidemic, many countries have interrupted the business contacts of multinational companies, resulting in the industrial chain fault. U.S. stocks triggered the fifth circuit breaker in history, crude oil futures fell by more than 30%, Saudi Arabia launched the "oil price war" and other factors, which triggered global capital market shocks, and also impacted the domestic oil and gas and chemical industry chain. The chemical industry chain is long and there are many derivatives. If the epidemic situation continues to worsen in Europe, the United States and other countries, the multi-party shutdown will cause the decline of foreign market demand, and affect the import and export of domestic chemicals and the entire industrial chain.
The head of a titanium dioxide industry said that although the titanium dioxide industry had maintained the pace of production during the Spring Festival and the epidemic period, but according to the latest analysis, titanium dioxide is expected to decline by about 40% in the end of March and the beginning of April.
Furthermore, foreign trade will be affected and a large number of products will be sold in China. According to the current tense and severe economic situation, the downstream real estate, automobile, home appliances and other categories of the domestic chemical industry will be affected, which will quickly spread to the industrial chain of coating, ink and other chemical industries, and sales will be blocked. Then it is unknown whether the domestic chemical industry will continue to produce, whether it will produce according to 100% of the production capacity, and whether it will carry out full load operation of all employees.
How can the chemical industry survive under multiple pressures?


The upstream supply is blocked, the downstream demand is low, the U.S. stocks are fused, and crude oil is falling, which is a multiple hit for the chemical industry. In addition, in recent years, some regions have not complied with the national requirements to avoid repeated law enforcement inspections by multiple parties, which has also caused a lot of burden to enterprises.


For some small and medium-sized enterprises with small scale, single business and not keeping pace with the times, or some "scattered pollution" enterprises with poor compliance, the pace of elimination is undoubtedly accelerated. For the chemical industry, it is also equivalent to a fire temper, a major reshuffle of the industry. What we strive for is quality reputation, more importantly, the ability of cash flow, solidarity and cooperation between upstream and downstream enterprises, and the ability of strategizing for business. In the end, how many enterprises will withdraw from the market in a gloomy way will depend on their respective capabilities and accumulation.