Analysis on the development trend of polyolefin in China
Analysis on the development trend of polyolefin in China
At the FlexPO meeting held in Shanghai on October 22-24, professionals gathered to discuss the trend of China's polyolefin market. Qi added that the macroeconomic environment is bad for PP and PE demand. In the past, demand growth was typically 15-20 percent, and now it's below 20 percent, she said. This is a great challenge." She added that nearly half of China's imports of PE and a third of its PP would come from the Middle East.
As for domestic production, production capacity is growing rapidly, and more and more advanced, investors start to diversify their investments. China has put in production of coal-based olefins, mostly in north and west China. Previously, she said, it was sinopec and petrochina, but now "private and large coal and power companies from abroad and Taiwan are also entering the industry."
Mr. Takliping suggested that the supply of polyolefin in the coming years would increase sharply. In the coal-to-olefins plant, most ethylene and propylene products are processed into PE and PP. Therefore, the development of the coal olefin industry will greatly accelerate the increase of Chinese polyolefin supply." She added that the material structure would change dramatically in the future. Over the next few years, 80% of PE's new capacity and 64% of PP's new capacity will come from coal-based olefins.
In recent years, she said, China's polyolefin market has shifted from "overall shortage" to "structural oversupply and structural shortages." For a long time, she added, China's polyolefin producers have chosen to produce general levels of polyolefin to meet most market needs. But she believes that with overcapacity, Chinese companies are starting to focus more on premium and specialty products to compete with foreign companies.
China's pollution problems have also had an impact on the olefin industry. The cost advantage of making olefin coal is challenging because of concerns about pollution and high costs, Chen said. She added that the topic of pollution taxes had already been heard, which could limit the production of olefin from coal. "Because of the pollution caused by coal, companies should pay more attention to the environment," said yu ting of ICIS. We should find a solution."
Gao liping, a senior consultant at the China chemical information center, spoke at the meeting about China's growing demand for polyolefin, particularly PP and PE. Since 2002, China's demand for PP imports and the demand and consumption of olefins from naphtha have risen steadily, she said.
China QiMin ICIS director said, although China has 70% of the oil produced from naphtha, but as a result of naphtha olefin prices, across Asia, naphtha olefin plant was shut down or switch to coal. Chen ying, a senior project manager at TZMI, added that naphtha is the most expensive to use. On the other hand, demand for gas based ethylene is growing and demand is slightly greater than supply. "The significant cost advantage of natural gas is the main driver of demand growth," she said
