Many companies in the polyether industry have increased the layout of high-end products

A few days ago, Shenyang Chemical issued an announcement that the company's 300,000 tons/year new high-performance polyether polyol project with a total investment of 2 billion yuan has been fully completed and put into production recently, and the project is located in Maqiao Chemical Industrial Park
, Huantai County, Zibo City, Shandong Province.

It is understood that polyether polyols have a wide range of applications, in recent years, the consumption of polyether products has shown rapid growth, and the total production capacity of the domestic polyether industry has gradually increased, with a total industry capacity of about 6.
7 million tons in 2021, a year-on-year increase of more than 10%.

Since the beginning of this year, a number of listed companies have successively disclosed the capacity layout of polyether polyols, with new planned production capacity exceeding 2 million tons
.

However, with the increasingly fierce competition in the polyether industry, the performance of related companies declined in the first half of this year, and some companies will plan projects for reconstruction
.
At present, the demand for polyether products in the downstream industry is increasing, and related enterprises are also increasing the layout
of high-end products.

Rapid growth in consumption Many companies have added polyether production capacity

According to the data, polyether polyol is referred to as polyether, is another key raw material in the polyurethane industry, and the products can be used in the automotive industry, plastic runways, waterproof materials, sealants, shoe materials, textiles and other fields
.

At present, the global polyether industry market is developing rapidly, although China's polyether industry started late, but China is the world's largest polyurethane production and consumption area
.

In recent years, the total production capacity of the domestic polyether industry has gradually increased
.
Since the beginning of this year, in addition to Shenyang Chemical, a number of listed companies have laid out
polyether polyol production capacity.

Data show that in 2021, the total production capacity of the domestic polyether industry will be about 6.
7 million tons, an increase of more than 10% over the total production capacity in 2020; In 2021, the total output of the domestic polyether industry will be about 4.
2 million tons, an increase of more than 20% over 2020, and the total operating rate of the domestic polyether industry in 2021 will be about 63%, which is a high level
in the past five years.

On August 17 this year, Rongsheng Petrochemical released three major project investment plans, including a 1.
4 million tons/year ethylene project with a total investment of 34.
5 billion yuan, including a 380,000 tons/year polyether polyol plant
.

On June 29, Longhua New Materials issued an announcement
on the completion and operation of the 360,000 tons/year high-performance polyether polyol expansion project.
The product structure of the project is mainly based on highly active polyether (high resilience polyether) and polyether for CASE (elastomer polyether), and after putting into operation, the total production capacity of Longhua New Material polyether reaches 720,000 tons/
.

On June 13, Hengli Petrochemical (Dalian) New Material Technology Co.
, Ltd.
's 1.
6 million tons/year fine chemical project was accepted
for environmental impact assessment.
This includes a 200,000 mt/year polyether polyol plant
.

In addition, Wanhua Chemical, a leading polyurethane company, is also increasing the layout of
the polyether industry.
On June 1, Yantai Municipal Bureau of Ecology and Environment made an approval opinion and announced
the environmental impact assessment document of Wanhua Chemical's 850,000 tons/year polyether polyol expansion project.

It is understood that by the end of 2020, the production capacity of Wanhua Chemical polyether project is 605,000 tons / year
.
According to the EIA announcement, Wanhua Chemical will build another 850,000 tons/year polyether polyol plant, and its polyether production capacity will be further expanded
after the project is put into operation.

According to incomplete statistics, since the beginning of this year, the newly planned annual production capacity of relevant listed companies in polyether polyol projects has exceeded 2 million tons
.

Industry insiders pointed out that in recent years, as polyether upstream raw material manufacturers expand production capacity, the overall supply has gradually increased, and the cost pressure of the industry is expected to be alleviated
.

On the other hand, the consumption of polyether products has also shown rapid growth
in recent years.

Data show that in 2021, the consumption of ordinary soft foam polyether is about 1 million tons, a year-on-year increase of more than 20%; POP (polymer polyol) consumption reached more than 600,000 tons, a year-on-year increase of about 28%, and the application side was affected by the increase in automobile production, and automobile consumption increased by about 48% year-on-year; The demand for high rebound polyether reached more than 400,000 tons, a year-on-year increase of 15%.

In addition, the demand for elastomer polyether reached more than 400,000 tons, a year-on-year increase of 6%, and the application end of the plastic runway and waterproof industry developed rapidly
.

Fierce competition in the industry Related enterprises layout high-end products

In the first half of this year, affected by multiple factors, the prosperity of the polyether industry was not high
.
The half-year performance of Shenyang Chemical and Longhua New Materials both declined
.
Shenyang Chemical said in its semi-annual report that due to the overcapacity of the polyurethane industry and the low overall operating rate, the company's polyether polyol products have serious
low-price competition.

Based on the current market situation of the polyether industry, the layout direction of companies in the industry has also diverged.

On June 27 this year, Lianchuang issued an announcement that it decided to terminate the investment and expansion of 45,000 tons/year polyether polyol and 20,000 tons/year cyclopentane-type combined polyether integration project
.

Lianchuang said that since the announcement of the investment project, the company has actively organized personnel to implement the feasibility study report, environmental impact assessment and safety assessment
.
At present, the demand growth of the downstream industry of basic polyether polyol products is weak, the industry competition is becoming increasingly fierce, the overcapacity is overcapacity, and the gross profit margin of the product is less than 5%, resulting in a long
return on investment period of the project.
After comprehensive consideration, Lianchuang decided to terminate the construction of the investment project, and planned to reconstruct the upgraded product end amino polyether with basic polyether
polyol as raw material with large profit margin and strong market demand.

According to reports, amino-end polyether is currently widely used in the wind power industry and jewelry materials, railway transportation, automobiles, plastic runways, elastomer polyurethane and other fields
.
In the field of polyurethanes, especially in high-performance elastomeric systems, polyethers or polyester polyols will increasingly be replaced
by amino-end polyethers.
From the perspective of global and Chinese market sales, China's market demand is growing faster than the world
.
With the steady recovery of renewable energy and the implementation of offshore wind power, the wind power industry has gradually improved, and the market demand for amino-terminated polyether has generally risen steadily
.

In mid-August, Longhua New Materials also disclosed that it plans to invest in the construction of an 80,000 tons/year amino polyether project, with a total investment of about 600 million yuan
.

Industry insiders analyze, the domestic low-end polyether market competition is fierce, with the acceleration of China's urbanization process and the upgrading of residential consumption, small and medium-sized manufacturers will be difficult to compete
with large-scale polyether manufacturers with large-scale production advantages in the fierce market competition.
At the same time, with the upgrading of consumer demand, consumers' demand for polyether products has gradually changed
from the original satisfaction consumption to enjoyment consumption.
The requirements of the downstream industry for polyether products are also gradually showing the characteristics of specialization, diversification and personalization, which puts forward higher requirements
for the future development of the polyether industry.
If polyether enterprises want to maintain a competitive advantage in the future market, they must continue to optimize production processes and proprietary formulas, adjust product grades based on market demand, improve product performance, and increase product share in market segments
.