S Koreaan Hyundai Motor to shut production as virus curtails auto parts supply

MOSCOW (MRC) -- South Korea's Hyundai Motor and Kia Motors will suspend car production indefinitely at all its local plants, reported S&P Global with reference to the company's statement Friday, due to a lack of auto parts from its China-based suppliers.

The shortage resulted from a prolonged shutdown of Chinese plants due to the coronavirus outbreak, it said.
Hyundai Motor operates seven plants in South Korea -- five in Ulsan, and one each in Asan and Jeonju. The Ulsan and Asan plants will suspend production Friday while Jeonju will stop production on Monday.

On the other hand, Kia Motors plans to suspend production at its eight local plants on Monday -- three each in both Hwaseong and Gwangju, and two in Gwangmyeong.

Hyundai Motor and its sister company, Kia Motors, had cut production last week after China-based South Korean suppliers stopped production since January 24 at the start of the Lunar New Year holidays.

The Chinese government told manufacturers to stop operations until February 9 to keep the virus from spreading farther.

"The expected date of operation resumption is depending on the supply of components," Hyundai Motor said.

It is the first time that Hyundai Motor has shut its plants since 1997 during the Asian financial crisis.

To offset the shortfall, Hyundai Motor said it will increase supplies from domestic and Southeast Asian suppliers.

In 2019, Hyundai Motor produced 1.79 million vehicles while Kia Motors made 1.45 million vehicles, up 2.2% and down 1.3%, respectively, from 2018.

Other local carmakers, such as GM Korea, SsangYong Motor and Renault Samsung Motors Corp., have either suspended or are considering cutting production.

SsangYong Motor suspended production at its Pyeongtaek plant from February 4 to February 12, citing the supply shortage.

As MRC wrote before, Russian dealers of Hyundai sold 178,809 cars in 2019, which corresponds to the level a year earlier. As a result, Hyundai ranked fourth in sales among all automakers in Russia, and the brand’s market share was 10.2% versus 9.9% a year earlier, according to AEB.

In September 2010 Hyundai Motor Company launched a plant in St. Petersburg (Hyundai Motor Manufacturing Rus). Currently, the factory produces Hyundai Solaris and Kia Rio models. The Hyundai plant accounts for the bulk of cars produced in St. Petersburg. Hyundai Motor's Russian plant operates on a full production cycle. Creating a car begins with stamping body panels from steel coils. The welding process is fully automated. All paintwork both outside and inside the body is applied by robots.

Polypropylene (PP) is one of the main feedstock materials for the production of interior parts of the car.

According to MRC's ScanPlast report, the estimated PP consumption in the Russian market was 1,260,400 tonnes in January-December 2019, up by 4% year on year. Supply of almost all grades of propylene polymers increased, except for statistical copolymers of propylene (PP random copolymers).
MRC

MOSCOW (MRC) -- Fujian Meide Petrochemical, a wholly owned subsidiary of China Flexible Packing Group, shut down one of its polypropylene (PP) unit last week, reported S&P Global.

Located in Fujian province, this PP unit's annual production capacity is 500,000/mt.

Many downstream PP plants in China were heard to have reduced their operating rates or shut down as they were not able to transport their products to the customers due to the closure of major roads in eastern China.

As MRC informed previously, Fujian Meide Petrochemical delayed the startup of its newly built propane dehydronation (PDH) plant in Jiangyin, southeastern Fujian province, to the second half of February. The new PDH with the capacity of 660,000 mt/year was originally scheduled to start up in the first half of February, 2020. High cost of feedstock propane was the cause of the delay.

According to MRC's ScanPlast report, the estimated PP consumption in the Russian market was 1,260,400 tonnes in January-December 2019, up by 4% year on year. Supply of almost all grades of propylene polymers increased, except for statistical copolymers of propylene (PP random copolymers).
MRC

MOSCOW (MRC) -- North Huajin Chemical Industry has taken off-stream its No. 2 polypropylene (PP) unit because of the pressure from inventories of material in the market, according to Apic-online.

This unit was shut on 8 February 2020. The restart date has not been specified yet.

Earlier, a Polymerupdate source in China informed that the company resumed operations at the plant on January 4, 2020, following an unplanned maintenance. The plant was shut on December 22, 2019.

Located in Liaoning province of China, the unit has a production capacity of 50,000 mt/year.

As MRC wrote before, North Huajin Chemical shut its PP unit in Liaoning on September 20, 2019. Further details on duration of shutdown was not available. Located in Liaoning province, China, the plant has a production capacity of 50,000 mt/year.

According to MRC's ScanPlast report, the estimated PP consumption in the Russian market was 1,260,400 tonnes in January-December 2019, up by 4% year on year. Supply of almost all grades of propylene polymers increased, except for statistical copolymers of propylene (PP random copolymers).

North Huajin Chemical Industries Group Corporation develops, manufactures, and markets fertilizers, synthesis resins, ethylene, methanol, and dimethyl in China. The company also manufactures PVC plastic windows and doors, functional membranes, PVC-U section materials, and laminated plastic woven bags. Its fertilizer products include urea and slow release urea for use in agriculture, husbandry, and fishery markets. North Huajin Chemical Industries Group Corporation was founded in 2002 and is based in Panjin, China.
MRC

MOSCOW (MRC) -- Zhejiang Shaoxing Sanyuan Petrochemical took off-stream one of its polypropylene (PP) plants in China last week because of logistical issues, reported S&P Global.

Located in Zhejiang Province, this plant's annual production capacity is 300,000/mt yr.

The company also operates another PP plant at the same site with a capacity of 200,000/mt yr and a propane dehydrogenation (PDH) unit with a capacity of 450,000/mt yr.

Many downstream PP plants in China were heard to have reduced their operating rates or shut down as they were not able to transport their products to the customers due to the closure of major roads in eastern China due to coronavirus.

According to MRC's ScanPlast report, the estimated PP consumption in the Russian market was 1,260,400 tonnes in January-December 2019, up by 4% year on year. Supply of almost all grades of propylene polymers increased, except for statistical copolymers of propylene (PP random copolymers).
MRC

MOSCOW (MRC) -- China Council for the Promotion of International Trade (CCPIT) announced in a statement that it would offer force majeure certificates to Chinese businesses affected by the coronavirus outbreak, reported NCT.

CCPIT, an international trade promotion agency accredited with the Chinese Ministry of Commerce, said: "Some enterprises in China have suffered severe impacts on goods and logistics, which may result in the failure to perform international trade contracts or contractual contracts."

CCPIT said that businesses affected by the coronavirus outbreak may apply to the agency for a certificate related to force majeure. Applicant companies must provide legitimate documents, including proof of delays or cancellation of transportation, exports contracts and customs declaration, the agency noted.

The outbreak has prompted Chinese officials to extend the Lunar New Year holiday in an attempt to prevent the spread of the virus, raising concerns over the post-holiday demand in Asian polymer markets.

As MRC informed earlier, BP said the deadly coronavirus outbreak could cut global oil demand growth by 40% this year, putting pressure on Opec producers and Russia to curb supplies to keep prices in check.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,093,260 tonnes in 2019, up by 6% year on year. Shipments of all PE grades increased. PE shipments rose from both domestic producers and foreign suppliers. The estimated PP consumption in the Russian market was 1,260,400 tonnes in January-December 2019, up by 4% year on year. Supply of almost all grades of propylene polymers increased, except for statistical copolymers of propylene (PP random copolymers).
MRC