2019中国能源化工产业发展报告-中石化-2019.3-107页_3mb

Summary of "New Horizons for China Petrochemical Industry" (2019)

Core Content

This report provides an overview of the growth and development of China's petrochemical industry, highlighting key trends, market dynamics, and future projections up to 2025. It discusses the expansion of petrochemical capacity, the evolving market structure, and the impact of external factors such as urbanization, e-commerce, and environmental policies.

Main Points

1. Increasing Petrochemicals Capacity of China

• Ethylene and PX Capacity: In 2018, China's ethylene and PX capacity reached 25MTA and 13.8MTA respectively, with expectations to grow to 53MTA and 40MTA by 2025, maintaining the world's largest capacity.
• Regional Distribution:
  • Bohai Gulf: Expected to contribute 13.5MTA of C2 (24%) and 13.3MTA of PX (30%) by 2025.
  • Yangtze River Delta: Expected to contribute 15.3MTA of C2 (27%) and 20.2MTA of PX (45%) by 2025.
  • Pearl River Delta: Expected to contribute 6.4MTA of C2 (11%) and 2.0MTA of PX (4.5%) by 2025.
• Major Projects (2019-2025):
  • 2019: Zhejiang PC Phase I/II
  • 2020: Hengli PC, Gulei PC, ZRPC
  • 2021: North Huajin PC, Shenghong PC, RISUN
  • 2020-2025: ZRCC, Hainan Refining & Chemical
  • TBD: FHC & SABIC JV
  • 2023: ExxonMobil OTC Project
• China's Contribution to Global Capacity Growth: China is expected to contribute 50-70% of the new capacity in the next two rounds of expansion in 2019 and 2023.

2. Booming Petrochemicals Market of China

• China as the Largest Market: China remains the largest petrochemical market globally, with a projected demand growth that outpaces the world GDP.
• Market Demand:
  • Synthetic resin demand is expected to reach 135MTA.
  • Fiber demand is expected to reach 60MTA.
  • Rubber demand is expected to reach 3.2MTA by 2025.
• Per Capita Consumption: China's per capita consumption of petrochemicals is catching up with Japan and Europe, but still lags behind South Korea and the U.S.
• Economic Drivers: Massive urbanization and consumption upgrading are expected to drive significant new consumption and investment by 2030, with 250 billion $ new consumption and 2750 billion $ new investment.
• E-commerce Impact: The growth of e-commerce and catering services is expected to increase the demand for polyolefins by 1-2% annually.
• Environmental Protection: The waste plastics import ban and higher recycling rates are increasing the demand for virgin PE by 0.7-1.0 million tons, while air-pollution control regulations are boosting natural gas pipeline demand by 10%.

3. Trends and Challenges

• Market Opening-up: China's petrochemical market is becoming more open, with foreign investors like Saudi Aramco and SABIC entering the market.
• Diversified Market: The market is becoming more diversified, with the introduction of new technologies and processes such as the Diesel HC process and H-oil process.
• Profitability Pressures: Overcapacity in some products is expected to put temporary downward pressure on profitability, but a rebound is anticipated after 2025.
• Consolidation: Stricter environmental regulations and fierce competition are leading to the consolidation of the industry, with a decline in small companies and an increase in market concentration.
• EV Development:
  • China is expected to lead in EV adoption, with EV sales reaching 5 million by 2020, 20 million by 2025, and 80 million by 2030.
  • EV will shift the feedstock structure from transportation fuel to petrochemical feedstock.
  • EV development is expected to reach cost parity with conventional vehicles by 2025, and Level 5 autonomous driving by 2030.
• Refining Industry Outlook:
  • China's refining capacity is expected to grow to 18.8 million b/d by 2025.
  • New capacity will be more concentrated in eastern coastal areas and integrated.
  • The refining industry will undergo transformation and upgrading, focusing on producing petrochemical feedstock.

Key Information

• Ethylene Self-Sufficiency: Ethylene self-sufficiency is rising, but more than 10MT of equivalent ethylene still needs to be imported.
• Propylene and Butadiene: Propylene and butadiene are nearing a balance in supply and demand, while PP still requires imports.
• PX Overcapacity: PX is expected to reach overcapacity by 2025 due to extensive investment.
• Benzene: Benzene import will not disappear, but capacity utilization may increase.
• Refined Oil Export: China's refined oil exports are expected to increase, but the net export will not grow significantly due to low yield in new capacity.
• International Cooperation: The "Belt and Road Initiative" and other international projects are boosting oil and gas cooperation.
• Domestic Developments: New refineries and integrated projects are under construction or planned, including PDVSA-CNPC Jieyang refinery, BASF's petrochemical base in Guangdong, and others.

Conclusion

China's petrochemical industry is poised for significant growth and transformation. The market is expanding, driven by urbanization, consumption upgrades, and technological advancements. Despite challenges such as overcapacity and profitability pressures, the industry is expected to rebalance and rebound after 2025. The increasing role of electric vehicles and the opening-up of the market are also expected to shape the future of the petrochemical sector in China.