Review of the 13th Five-Year Plan for my country’s Refining and Chemical Industry

During the "Thirteenth Five-Year Plan" period, China's large-scale oil refining capacity has been put into production.

"Thirteenth Five-Year Plan"

China's refining and chemical industry has achieved positive results in terms of scale and strength, structural adjustments, oil quality upgrades, and market-oriented transformation, showing strong anti-risk capabilities

Large-scale refinery

Looking back at the "Thirteenth Five-Year Plan", China's oil refining and ethylene production capacity continues to expand, ranking second in the world, second only to the United States

In the past five years, the global oil refining industry as a whole has been at a relatively high level, demand has achieved rapid growth, and capacity expansion has shifted from focusing on speed to focusing on quality

During the "Thirteenth Five-Year Plan" period, China's large-scale oil refining capacity has been put into production, and with the acceleration of the high-quality development of the oil refining industry, new characteristics have emerged-the new capacity is mainly ten million-ton refineries

In the past five years, the number of domestic 10-million-ton refineries has increased from 25 to 28, and the average size of China’s refineries has increased from 5.

Diversification of Competitors

In this wave of production boom, Hengli Petrochemical and Zhejiang Petrochemical entered the market with super-large-scale projects, marking that private enterprises have stepped onto the industry stage in the form of emerging large-scale refining and chemical industries

As of the end of the 13th Five-Year Plan period, the refining capacity of private enterprises accounted for 31% of the country's total capacity, ethylene capacity for 6%, and paraxylene capacity for 22%

Facing the strong competitiveness of large-scale refining and chemical projects, local refining seeks to survive through integration

Focusing on the terminal, the intensity of reform is also increasing

Clean process products

During the "Thirteenth Five-Year Plan" period, the quality of gasoline and diesel in China has achieved a leap from National 4 to National 6

"If you look at the time axis longer, China's gasoline started from the National 1 standard in 2000, and diesel started from the 2002 National 1 standard.

The improvement of product quality reflects the improvement of upstream process level

Refining and chemical technology continues to develop in the direction of energy saving and emission reduction

"Reduce oil and increase" trending

During the "13th Five-Year Plan" period, the development of China's refining and chemical industry has gradually shown a trend of differentiation.

The shift in economic driving forces and the adjustment of the automobile industry have led to a transition from medium-to-high-speed growth to low-speed growth in refined oil consumption

In 2020, the sudden outbreak of the epidemic caused a heavy blow to the demand for refined oil.
Among them, the aviation industry suffered the largest decline in passenger traffic since 1978, and jet fuel was most affected by the epidemic
.
Experts predict that China's jet fuel demand will not fully recover until at least 2022, and the peak of refined oil consumption will come early at the end of the "14th Five-Year Plan" period
.

Corresponding to it is the booming ethylene industry chain
.
There is a huge gap in China's ethylene market, and production capacity is ushering in a rising period
.
During the "13th Five-Year Plan" period, domestic ethylene equivalent consumption exceeded 57 million tons, with an average annual growth rate approaching 9%, and the new scale was equivalent to the overall consumption in Western Europe
.
During this period, domestic urbanization dividends continued to be released
.
Stimulated by consumption, China's ethylene production capacity has increased from 21.
19 million tons/year in 2015 to 35.
18 million tons/year in 2020, with an average annual growth rate of 9% and a self-sufficiency rate of 80%
.

Experts remind that "reducing oil and increasing oil" must be moderate, and the dilemma of surplus refining cannot be transferred to the chemical industry
.

"Fourteenth Five-Year Plan"

China’s refining and chemical industry will develop in the direction of large-scale, integrated, and industrial parks.
It will enter a period of full release of new production capacity and fierce competition.
Chemical development has become a new trend
.

Forced by the expansion of energy, the industry may undergo a deep restructuring

Ke Xiaoming believes that the new round of refining and chemical expansion will drive market competition intensified, refining overcapacity will further intensify, and some chemical products will enter a surplus stage
.
It is expected that with the release of new refining capacity, China will have a large surplus of refined oil products in 2025, requiring exports of about 70 million tons
.

At the same time, the production and operation pattern of domestic refining and chemical companies will change, and the pressure on high-cost companies in inland areas will further increase.
The surplus of refined oil is mainly concentrated in coastal provinces such as Guangdong and Zhejiang
.

Where are the 70 million tons of refined oil exported? The future is uncertain
.
Originally, China's refined oil products were mainly exported to Southeast Asian countries, but in the future, the US refined oil products will also be further surplus, or will be exported to Europe.
After the market share of the Middle East in Europe is squeezed by American products, it will shift to the Asia-Pacific region
.
China's original export space will be compressed
.

At the same time, some disruptive technologies and emerging business models may change the domestic energy consumption structure, triggering profound changes in production and consumption, and the refining and chemical industry may face unprecedented survival of the fittest and in-depth reconstruction
.

The "2021 China Energy and Chemical Industry Development Report" pointed out that during the "14th Five-Year Plan" period, the refining and chemical industry will rely on integration, large-scale, and industrial parks to enhance its core competitiveness
.
It is estimated that by 2025, the number of ten-million-ton refineries will increase to 33, and the average scale will increase to 7.
02 million tons per year, which is close to the global average
.
Refining and chemical integration will become standard equipment for new refineries
.
The "Three Circles and Three Belts" industrial pattern characterized by the three major refining and chemical enterprise clusters in the Bohai Rim, the Yangtze River Delta and the Pearl River Delta and the three major refining and chemical industrial belts in the northeast, northwest and along the Yangtze River has basically taken shape
.
The development of the park will greatly increase the industrial concentration, and the upstream and downstream industries in the park will be highly correlated.
Through the on-site transformation of raw materials and the centralized treatment of sewage, the competitiveness and anti-risk capabilities of enterprises will be greatly enhanced
.

With subdivided consumer demand, high-end products are accelerating

At present, China's chemical trade deficit is as high as 260 billion to 280 billion yuan per year.
The problems of excess low-end and insufficient high-end severely restrict the high-quality development of the industry.
During the "14th Five-Year Plan" period, 70% of chemical products may face a crisis of excess
.

In the future, China's industrial development will shift from heavy industry to new infrastructure and high-tech industries
.
New changes in the industrial environment will create greater space for the refining and chemical industry, especially downstream consumption of the ethylene industry chain
.
Important strategic deployments such as constructing a new development pattern of "dual cycles" will accelerate the filling of the gaps in high-end products in the ethylene industry chain, reduce the external dependence of high-end polyolefins, and accelerate the upgrading of downstream industries and further expand the consumption space
.

"It is estimated that in the next 5 years, the demand for high-end chemical new materials will increase by 7.
5% annually, and 13.
5 million tons of high-end chemical materials will be added each year, which is equivalent to driving ethylene equivalent consumption by 1%
.
" Ke Xiaoming suggested that the refining industry should choose automobiles, construction, etc As a breakthrough in the field, we will vigorously develop high-end products such as high-strength carbon fiber, high-VA content EVA (ethylene-vinyl acetate copolymer), and metallocene polypropylene
.

Experts pointed out that the endogenous demand for chemical products will grow rapidly as the pace of China’s rural revitalization accelerates, the urbanization rate increases, and the per capita GDP increases
.
New technologies and new consumption models will also stimulate demand-the integration of new technologies such as 5G and traditional industries will accelerate, which will continue to generate subdivided consumer demand, such as the large-scale application of plastic pallets and the popularization of robots with plastic casings
.
The growing demand for smart home appliances and other smart devices will continue to bring opportunities to chemical products
.
The substantial increase in service-oriented consumption will accelerate the consumption of packaging materials
.

Under the goal of carbon neutrality, the circular economy of new materials and plastics is promising

At the Central Economic Work Conference that closed on December 18, 2020, "Doing a good job in achieving carbon peaks and carbon neutrality" was listed as one of the key tasks in 2021.
China's carbon dioxide emissions strive to reach the peak by 2030 and strive for 2060.
To achieve carbon neutrality in the past has clearly released a signal for China to practice green and low-carbon development and accelerate the transformation of energy consumption patterns
.

For the refining industry, green and low-carbon development is both a challenge and an opportunity
.
Polyolefin is one of the most important synthetic materials.
China's polyolefin industry has developed rapidly and is the world's largest producer and consumer.
However, there is still much room for improvement in green technology
.

With the deepening of the concept of green and low-carbon, "competitive products" such as new energy vehicles will continue to increase
.
Although the rapid development of new energy vehicles has squeezed out the consumption space of refined oil, it has spawned consumer demand for new materials and battery materials that help the lightweight development of automobiles, such as high-rigidity and high-impact polypropylene and polyolefin thermoplastic elastomers
.

In recent years, the global "plastic restriction order" has been continuously upgraded, and the plastic circular economy has promising prospects
.
Experts predict that during the "14th Five-Year Plan" period, the impact of relevant policies on global plastic consumption is 3% to 4%.
Although the scale is limited, with the in-depth implementation of the policy, it will have a profound impact on the structure of plastic products
.
For example, in order to increase the recycling rate, modified PET (polyethylene terephthalate) bottle caps are used instead of HDPE (high-density polyethylene) bottle caps to facilitate the joint recycling of the cap and the bottle
.

The recycling of plastics mainly includes two methods: technical recycling and biological recycling.
The former is relatively mature
.
The technology cycle includes two development directions of physical reuse and chemical reuse
.
At present, physical recycling has been widely used, but as far as the trend is concerned, the recycling amount of this method is less than 9% of the consumption of polymer materials, and new technologies need to be developed
.
Under the background of limited plastics, projects such as the research and development of degradable plastics and the recycling and utilization of waste plastics will usher in a trend
.