Production has just resumed and production is limited! As a result of "double control", the production capacity of enterprises in Jiangsu Guannan Chemical Park has been limited, and more than 10 listed chemical companies in Jiangsu have been affected.

In March 2019, the explosion of the chemical park in Xiangshui, Jiangsu Province also affected the chemical park in Guannan, Lianyungang, Jiangsu Province. Many enterprises were suspended and rectified, and some enterprises were not able to resume production until this year.

However, only a few months after the resumption of production, the double control that swept through many provinces across the country has once again affected enterprises in the Guannan chemical park. According to local sources told the Financial Associated Press, at present, there are only five enterprises in production in the chemical park, and the production capacity is limited to about 50%, including subsidiaries of Asia State Co., Ltd. (603188.SH).

It is worth noting that due to the shortage of power supply, the voice of listed companies in the chemical industry has been "brushed the screen" recently. according to statistics from the Financial Associated Press, only no less than 10 listed companies in Jiangsu have issued announcements to limit production and stop production.

Production capacity is limited to 50%

Guannan County of Lianyungang is a concentrated place of chemical production, with many chemical parks such as Lianyungang Chemical Industrial Park, but due to the impact of environmental protection rectification, all enterprises in the local chemical park have stopped production and rectification for as long as three years since April 2018. Until this year, Guannan County has successively approved applications for resumption of production of some chemical enterprises.

The above-mentioned person told the Financial Associated Press that the enterprises in production in Lianyungang Chemical Industrial Park include Lianyungang Branch of Yabang Co., Ltd., Jiangsu Hua'er Chemical Co., Ltd. (hereinafter referred to as "Wall Chemical") and so on. Wall Chemical is also a subsidiary of Yabang Co., Ltd. However, due to issues such as energy control, these companies have been limited to about 50% of their production capacity in the near future.

According to the official website of the Guannan County government, in January and June this year, several chemical enterprises' applications for resumption of production were verified at the county level respectively. In addition to the above-mentioned enterprises, they also include Jiangsu Zhongneng Chemical Science and Technology Co., Ltd., Jiangsu Dipu Science and Technology Co., Ltd., Lianyungang crop Science and Technology Co., Ltd., Jiangsu Jinguang Chemical Technology Co., Ltd., and Lianyungang Sanlian Chemical Co., Ltd.

A reporter from the Financial Associated Press saw from the semi-annual report of Yabang shares that after obtaining the government's approval to resume production, its Lianyungang branch started production on April 9, and Wall Chemical started production on May 8. According to Yabang shares, three more companies have completed their own rectification, waiting for the government to start the acceptance process of resuming production. In the first half of 2021, the total operating income of Yabang shares reached 234 million yuan, down 32.35% from the same period last year, while the net profit lost 115 million yuan. The company said that although sales rebounded after the recovery of production capacity, there was still a gap in inventory sales compared with the previous year.

In addition, at the end of June this year, Yabang also said on the interactive platform that Walter Chemical is still in the stage of gradual recovery of production capacity, which is expected to achieve full recovery in the third quarter. However, judging from the current situation learned by reporters of the Financial Associated Press, the recovery of production capacity of Yabang shares is not as good as expected.

In response, a chemical analyst told the Financial Associated Press that Yabang shares had been prompted by special risks due to a large-scale shutdown caused by environmental protection, and made continuous profits and losses in 2019, 2020 and the first half of this year. With the gradual recovery of major production capacity and the withdrawal of two subsidiaries from Lianyungang Chemical Park, which received more than 300 million yuan in government exit compensation fees, the company successfully "took off its cap" in June this year. However, if the recovery of production capacity is not as expected, the company's market outlook will still be affected.

More than 10 listed chemical companies in Jiangsu are affected

A reporter from the Financial Associated Press also noted that recently, at least 10 listed chemical companies in Jiangsu have issued announcements one after another in response to the impact of power restrictions on their operations.

Among them, Huachang Chemical (002274.SZ) announced on September 27th, September 16, the government departments of the company's jurisdiction recommended that enterprises limit electricity and production. On the morning of the 27th, the local government department asked for further power restriction and production restriction; on the basis of the operation of a single system, the company will reduce the load by 20%, which will affect the overall production capacity of 7000 tons / month.

Jinpu Titanium Industry (000545.SZ) announced that the production line of the subsidiary Nanjing Titanium dioxide Chemical Co., Ltd. was temporarily limited, while the production line of the subsidiary Xuzhou Titanium dioxide Chemical Co., Ltd. was temporarily suspended. At present, it is impossible to determine the exact time for the full resumption of production of the subsidiary.

Subsequently, on September 24th, limin shares (002734.SZ), Lanfeng biochemical (002513.SZ), Nanjing Chemical Fiber (600889.SH) have issued a suspension notice that the company's related production facilities have been suspended, resulting in the market supply of many chemical products will be affected.

Prior to this, Shuangle shares (301036.SZ) * ST Chengxing (600078.SH), Jinji shares (300798.SZ), Chenghua shares (300610.SZ) Red Polaroid (002165.SZ) and other companies also issued parking, stop production announcements, which will have a certain impact on various companies.

In response, a person from a chemical enterprise in Suzhou told the Financial Associated Press that in addition to the chemical listed companies that have been announced, many chemical enterprises have not issued an announcement because they have not been greatly affected. however, this wave of double control has a great impact on chemical enterprises in Jiangsu Province, and more than 10 chemical listed companies must have been affected.

However, with regard to the production restrictions of chemical enterprises, the above-mentioned analysts told the Financial Associated Press that the newly built or existing production capacity of the enterprises has been hindered, and the production progress of the capacity under construction has slowed down. it may cause the performance release of the relevant enterprises to be less than expected. In addition, the rising rate of chemical prices has further increased recently, but contrary to the trend of chemical prices, the share prices of the chemical sector have fallen in recent trading days, indicating that product price increases have suppressed downstream demand. as a result, the product sales of relevant enterprises may be hindered.