Export Volume of Furfural in Tianjin Port was 11,441 Tonnes

Date: 2015-09-08

“Operating rate of furfural enterprises declines affected by environmental problems in Aug. 2015

In 20 Aug.-4 Sept., 2015, since Beijing will held the World Athletics Championships and the military parade in celebrating the 70th Anniversary of China’s Victory in the Anti-Japanese War and the World’s Victory over Fascism, the Chinese government decided to implement emission reduction measures in Beijing and six surrounding provinces/cities (Tianjin, Hebei, Shanxi, Inner Mongolia, Shandong and Henan) in order to ensure the air quality during this period. Thus, the major air-polluting enterprises in these six provinces/cities should launch related measures including suspension for overhaul and emission purification to reduce the pollutant. It is disclosed that in this period, the emission of major pollutants should reduce by over 30%.

Production suspension: good news or bad news?
At the current stage, environmental problem has become the major factor that restrains the development of China’s furfural industry. Every time on the environmental supervision, operating rate of furfural enterprises will drop. Furthermore, Beijing holds more and more international events and meetings in recent years. Coupled with that most of furfural enterprises are located near Beijing. In order to ensure the air quality, furfural enterprises were shut down frequently. From another prospective, the periodical suspension of production can help relieve the oversupply in China’s furfural industry, since the whole industry is now suffering from overcapacity and the downstream foundry industry is in downturn. Reviewing the two suspensions of production for environmental protection since the end of 2014 (the APEC meeting held in Nov. and the issuing of new Law on Environmental Protection in April), they both boosted the market price to go up. Maybe it is a good thing for manufacturers and suppliers. 

Reducing operating rate increases the ex-works price
Affected by the continuous sliding operating rates of furfural enterprises, China’s ex-works price of furfural was rebounded. Nevertheless, due to the slack season of terminal foundry industry under the hot weather and the hindered export of downstream products, the demand for furfural declines. Industrial insiders reflected that although the ex-works price of furfural increases, the actual transaction volume and transaction price did not improve significantly.
CCM’s data show that in Aug., China’s market price of furfural is USD1,338.9/t (RMB8,190/t), up 1.2% compared to USD1,324.2/t (RMB8,100/t) in July while down 6.8% compared to USD1,436.4/t (RMB8,790/t) in Jan.

Operating rates of furfural enterprises reduce
China’s furfural industry is a polluting industry especially in air pollution. Importantly, over 90% of China’s furfural capacity distribute in throughout these above six provinces/cities. Of these, the furfural capacity of Shandong and Hebei accounts for about 50% of the total. Affected by the celebrations and sports events, China’s furfural enterprises should suspend production and reduce operating rates to achieve the goal of emission reduction.
In addition, it is known that due to the sudden blast in Tanggu, Tianjin, part of frfuryl alcohol enterprises (Furfuryl alcohol, downstream product of furfrual)’s export was hindered, which reduced the demand for furfural. Some furfural enterprises even shut down ahead of time.
According to China Customs, in H1 2015, the export volume of furfural in Tianjin Port was 11,441 tonnes, accounting for 27.3% of the total in China. Tianjin Port is the second largest exporting ports for furfural in China, only next to Qingdao Port.
As of 20 Aug., 2015, China’s operating rate of furfural enterprises was merely 25%, further reducing compared to 34% in July, according to CCM.

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