High-end development has become the "13th Five-Year" polyolefin industry upgrading key direction

　　Core tip: Polyolefin (Polyolefin, PO) is a polymer of ethylene, propylene or higher olefins. It is the largest and most widely used polymer material, including polyethylene (PE) and polypropylene.

Polyolefin (Polyolefin, PO) is a polymer of ethylene, propylene or higher olefins. It is the largest and most widely used polymer material, among which polyethylene (PE) and polypropylene (PP) are the most important.

Yahua Consulting believes that during the 13th Five-Year Plan period, with the rapid development of coal (methanol) to olefins (CTO/MTO) and propane dehydrogenation (PDH) routes, China's polyolefin production capacity and output will continue to grow, self-sufficiency rate will continue to increase, and diversified competition will further intensify. However, due to the insufficient supply of domestic high-end polyolefin products, they are heavily dependent on imports. Therefore, high-end polyolefin products are developed and import substitution is realized, it will be the key direction of China's polyolefin industry upgrading.

1. China's polyethylene supply and demand status quo

Yahua Consulting data show that by the end of 2016, China's polyethylene production capacity reached about 17 million tons/year and the new production capacity was about 1.5 million tons/year, all from CTO/MTO projects. In 2016, China's apparent consumption of polyethylene was about 24 million tons, the output was about 14 million tons, and the net import volume was nearly 10 million tons. The main consumption areas of polyethylene are concentrated in film, injection molding, blow molding and pipe.

From 2007 to 2016, the average annual growth rate of China's polyethylene production and consumption exceeded 8%, and the self-sufficiency rate increased from the lowest 50% to more than 60%.

2. Supply and demand status of polypropylene in China

Yahua Consulting data show that by the end of 2016, China's polypropylene production capacity reached about 22 million tons/year, with an additional capacity of about 3.5 million tons/year, mainly from MTO and PDH routes. In 2016, the apparent consumption of polypropylene in China was about 21 million tons, the output was about 18 million tons, and the net import volume was nearly 3 million tons. The consumption of polypropylene is mainly concentrated in woven products, injection molding and BOPP.

From 2007 to 2016, the average annual growth rate of China's polypropylene apparent consumption exceeded 8%, while the average annual growth rate of production exceeded 10%. As the growth rate of polypropylene production in China is faster than that of consumption, the self-sufficiency rate is basically increasing year by year.

3. China polyolefin supply and demand outlook

By the end of 2016, the total production capacity of polyolefin (PE/PP) in China was about 39 million tons/year, but the supply and demand gap was nearly 13 million tons. During the 13th Five-Year Plan period, with the completion of large-scale refining and chemical integration projects such as Huilian Phase II, Gulei Petrochemical, Sinochem Quanzhou, Zhejiang Petrochemical (Phase I) and Hengli Petrochemical, as well as the rapid development of CTO/MTO, ethane cracking to ethylene, PDH and other routes, China's total polyolefin production capacity is expected to reach 46 million tons/year by 2020, of which 16.5 million tons/year will be coal (methanol)-based polyolefin.

During the 13th five-year Plan period, with the development of China's urbanization and agricultural modernization, as well as more extensive application in rail transit, automobile lightweight, medical equipment, electronic and electrical appliances and other industries, China's polyolefin consumption will continue to grow. It is estimated that the demand for polyolefin in China will be nearly 50 million tons in 2020, and there is still a gap of nearly 4 million tons between supply and demand.

4. High-end into polyolefin industry development focus

At present, structural contradictions in China's polyolefin industry are prominent. On the one hand, China's polyolefin products are mainly low-end general-purpose materials, which are encouraged by market competition; on the other hand, high-end polyolefin products are heavily dependent on imports, and the current self-sufficiency rate is less than 30%.

Yahua Consulting believes that during the "13th Five-Year Plan" period, the upgrading of China's polyolefin industry needs to focus on technological innovation in high-end, differentiated, and diversified product development. Increase the development and market promotion of high-end polyolefin products such as metallocene polyolefin elastomer, bimodal polyolefin and ultra-high molecular weight polyethylene, and increase the production ratio of high-end materials and special materials such as polypropylene pipe special materials, capacitor film special materials, polyethylene automobile fuel tank special materials, gas pipeline special materials and automobile bumper special materials, so as to enhance the competitiveness of China's polyolefin industry.