PetroChina Dalian to curb wax output from July

State-controlled PetroChina to extend a shutdown of the wax unit at its 410,000 b/d Dalian petrochemical plant because of low demand during what should have been peak candle season.

At least 20pc of Dalian's total refinery capacity, including its wax-producing plant, will be taken offline immediately after a turnaround that began in late-May and should end soon.

Regional wax demand has slumped during Covid-19 lockdowns that were introduced from late-April. Restrictions on gatherings in Thailand, South Korea and Japan has meant that visiting temples has become a rarer occurrence, and the Songkran Thai new year celebrations in April were indefinitely postponed. This has dealt a blow to the candles market, which should have been at its peak during this time.

The refinery has had difficulty in finding buyers for its wax cargoes for loadings in May and June. It typically produces a around 20,000 t/month for domestic and export markets.

China exported 33,000t of fully-refined paraffin wax with less than 0.75pc oil content in May, the lowest this year and less than half of the 68,000t exported in March. With demand low, storage tanks have filled and exporters have cut prices to record lows.

North China fully-refined liquid paraffin wax prices assessed by Argus slipped to $690-710/t in June, and solid slabs of the grade were at $740-760/t — both the lowest since Argus started assessing these prices in February 2016. North China prices have been falling steadily since March 2018, and more rapidly this year. Prices have fallen every month since the start of the year except for March, when they rose by $50/t following Covid-19-related refinery closures and tighter supply.

By Liz Ng