The "14th Five-Year Plan" olefin market has unprecedented pressure on excess

The release of domestic production capacity is severely impacted by imports

The release of domestic production capacity is severely impacted by imports

With the rapid release of domestic production capacity and the strong competitiveness of foreign imports, during the "14th Five-Year Plan" period, China’s olefin products represented by ethylene and propylene will face unprecedented excess pressure, making it difficult for the market to enter the "involutionary era".
Avoid
.

This is the research and judgment made by many industry experts at the high-quality development sub-forum of the petrochemical industry of the 2021 China Chemical Industry Park and Industrial Development Forum held a few days ago

Full release of production capacity

　Full release of　production capacityFull release of production capacity

In recent years, China's petrochemical basic raw material technology routes have been continuously enriched.
In addition to crude oil, coal, and methanol, more and more products are derived from ethane, propane, and light hydrocarbons.
The diversified development trend of the industry is obvious.
The "14th Five-Year Plan" Petrochemical products will usher in an unprecedented peak in capacity release
.

Cheng Lihong, director of the Consulting and Evaluation Office of the China National Chemical Economic and Technological Development Center, said that during the 13th Five-Year Plan period, many refining and chemical projects have been put into operation.
There are already 33 ten-million-ton refineries across the country, and the refining capacity has exceeded 890 million tons by the end of 2020
.

The "14th Five-Year Plan" refining and chemical production capacity will also be released intensively, and olefin production capacity will also increase rapidly

According to Qu Liang, a senior engineer at the China National Petroleum Corporation Planning Institute, in 2020, Xinpu Chemical, Panjin Bora, and Yantai Wanhua will have a total of 2.
65 million tons of ethylene capacity put into operation, and there will be additional capacity in the future
.

Sinopec proposed to build 10 million tons of ethylene during the 14th Five-Year Plan, and PetroChina is also expanding new projects in Jieyang, Guangdong and the northwestern region

　　There are more sources of propylene, and the construction speed is faster
.

According to Qu Liang, China’s propylene production capacity has reached 45.

　　Import shocks are severe

　Import shock is serious　Import shock is serious

　　While local production capacity increases, foreign olefin imports may continue to increase, and the Chinese market has become the "eye of the storm" in the global petrochemical industry
.

　　Yu Jiao, vice president of the Institute of Economics and Technology of Sinopec Group Corporation, said that the global supply of bulk petrochemical products is relatively surplus
.

By 2025, the Middle East, the United States and China will form a major triangular pattern of global petrochemical production capacity

　　"After the shale gas revolution, the U.
S.
has rapidly increased its ethylene production capacity, but the rate of capacity expansion will slow down in the next 10 years.
This change will drive the reshaping of the global trade pattern, especially the U.
S.
and the Middle East may be involved in petrochemical products.
A new competitive relationship
will be created .

The United States, Russia, Japan and South Korea will all increase sales to China, while exports to China from the Middle East will be reduced.

　　Qu Liang also believes that with the acceleration of domestic production capacity construction, the global petrochemical industry chain competition pattern is still difficult to break
.

"Because the cost of basic raw materials in North America and the Middle East still occupies a great advantage, China is also an important target market for the future development of the petrochemical industry in North America and the Middle East, and we also see that the US petrochemical capacity construction will continue until 2023.

　　The era of "involution" is approaching

　　The era of "involution　　" is approaching the era of "involution " is approaching

　　Qu Liang predicts that under internal and external pressures, domestic bulk petrochemical products will face a 70% surplus by 2025, and the comprehensive self-sufficiency rate will reach 116%
.

From the perspective of the effective capacity satisfaction rate of major petrochemical products, the C₂ industry chain is facing invisible excess pressure, the C₃ industry chain basically balances supply and demand, and the C₄ industry chain has a surplus of 25%

　　Qu Liang believes that the domestic refining and chemical industry is accelerating mergers and acquisitions and production capacity integration, and the era of "involution" will come during the "14th Five-Year Plan" period
.
"Actually, there are many domestic mergers and reorganizations in the 13th Five-Year Plan period.
For example, the number of chemical companies above designated size that announced bankruptcy in 2018 and 2019 reached 189 and 342 respectively, and in 2020 there were more than 320, including some well-known companies.

With the explosive growth of domestic production capacity in 2021 and 2022, the market is likely to fall to the bottom again in 2022.

" Qu Liang said
.

　　Qu Liang mentioned that North America and the Middle East have significant resource advantages and will always maintain their petrochemical cost advantages
.
The crude oil price of US$60/barrel is a very important dividing point.
If oil prices increase sharply in the future, domestic refining and chemical integration projects may not be built so fast and so many
.
In addition, new projects must also consider the impact of changes in the financial market
.