Current Situation and Development Trend of China's Petrochemical Industry

From 2015 to 2021, the production capacity of basicpetrochemical raw materials such as olefins and aromatics in China expanded,and the self-sufficiency rate was significantly improved.

The compound annual growth rate of ethylene, propyleneand p-xylene production capacity was above 10%. Ethylene and propyleneself-sufficiency rates increased from 52% and 72% in 2015 to 61% and 86% in2021 respectively. The paraxylene self-sufficiency rate also increased from 44%in 2015 to 61%.

It is expected that from 2022 to 2025, the domesticsupply capacity of olefins and aromatics will continue to increasesignificantly. By 2025, the equivalent self-sufficiency rates of ethylene andpropylene will be further increased to over 73% and 90% respectively, and theself-sufficiency rate of p-xylene will be greatly increased to about 92%.

The increase in the supply capacity of olefins andaromatics is mainly the result of the following four aspects:

The first is the construction of large-scale (refiningand chemical) integration projects with large private enterprises, state-ownedenterprises, wholly foreign-owned enterprises, and Sino-foreign joint venturesas the main body;

The second is the transformation and upgrading of theoil refining industry and the industry promotion of “reducing refined oilproducts and increasing chemical output”;

The third is the ethylene steam cracking and propanedehydrogenation projects constructed with imported and domestic lighthydrocarbon resources as raw materials;

The fourth is modern coal chemical projects such ascoal-to-olefins.

The competition pressure of China’s ethylene industry chaincomes more from low-cost ethylene downstream resources such as polyethylene,polypropylene, and ethylene glycol, which use light hydrocarbons as rawmaterials in the United States and the Middle East. The competitive pressure ofthe propylene industry chain comes more from domestic raw materialdiversification projects such as propane dehydrogenation, methanol to olefins,etc.