Economy

Chain reaction

Latest explosion boosts opposition to dangerous PX plants

Firefighters try to extinguish a fire at a petrochemical plant in Zhangzhou

The inferno in Zhangzhou

“I told you so… this PX plant was always going to explode,” well-known blogger ‘Beijing Chief’ crowed last week. “It’s nothing to do with science or technology. It relates to the guys who are in charge.”

He then reposted comments made two years ago predicting that the Dragon Aromatics plant in Zhangzhou wouldn’t be up to safety standards. Last weekthe facility in Fujian province suffered a gigantic explosion, thought to have been caused by an oil leak.

The plant in question has a chequered history. In 2007, thousands of demonstrators rallied against plans for this paraxylene facility (PX is used to make fibres and plastics) in the southern city of Xiamen. In an unexpected move, the authorities backed down, shifting the factory to the nearby town of Zhangzhou.

Naturally, people living near the new location weren’t happy, despite promises from a local official that the plant would “definitely never” suffer an accident.

He was wrong: a blast hit the plant for the first time in July 2013, and now it has gone up in flames again. This time the explosion injured 19 people, with 30,000 more evacuated to safer ground.

Opponents of the plant in Zhangzhou have protested for years, with the most recent demonstrations reported last June. Their concerns now seem more than valid: the explosion shattered windows a kilometre from the plant, Xinhua says, and tremors were felt up to 50 kilometres away.

Anxiety about similar projects has stirred other protests (see WiC170 and 118 for the unrest in Ningbo and Dalian), while there were also reports that riot police had quashed a three-week rebellion against another chemicals firm in rural Inner Mongolia earlier this month, after waste was discharged onto nearby grassland.

The accident in Zhangzhou is particularly controversial. According to Century Weekly magazine, the Dragon Aromatics plant is owned by a Taiwanese businessman, who was wanted by the island’s police in 2003 for defaulting on huge debts.

Wider discussion of the Dragon Aromatics plant by netizens was soon being censored, although the local media was also critical, with Beijing News describing the accident as man-made. Two incidents at the same facility also pointed to its bosses caring more about making money than operating safely, the newspaper claimed.

The Economic Observer had different concerns, focusing on years of disagreement between the Ministry of Environmental Protection (EPM) and the NDRC, the state-planning agency, over the project. Eleven months ago, EPM bosses were said to have sent an official letter to the NDRC insisting that the plant close because it still hadn’t obtained its necessary permits.

News of the explosion will bolster the determination of other communities not to allow new chemical projects in their own backyards. But the blast also had an immediate impact on PX prices. The Zhangzhou plant accounts for about a tenth of domestic capacity, according to commodity research outfit ICIS, and the cost of paraxylene imports from overseas rose 4.8% the day after the fire.

In part that may reflect that the industry expects a tightening of safety rules at existing facilities, or that it might get more difficult to build new plants in future. But the real conundrum is that demand for paraxylene is increasing. Xinhua says that Chinese producers are already having difficulties keeping up, with domestic output meeting less than half of the country’s needs in 2013. That suggests that there will be greater commercial pressure to build more plants, offsetting the clamour to close more of them down. ICIS, the commodities research house, says that there is 14 million tonnes of PX capacity nationwide, but that another 12 million tonnes of output is being proposed.


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