From 2016-2020, China's chemical industry development tends to the leading enterprises

Resources are concentrated to the leading companies, and multiple factors constrain the unrestricted growth of China's chemical industry.

Constrained by environmental protection policies, funding and other factors, China's chemical industry investment entered a low growth phase after 2016.Since 2015, Chinese government agencies have introduced a number of environmental protection policies on chemical parks and chemical industry development, raising the investment threshold for chemical projects and eliminating backward production capacity through environmental capacity, environmental access, chemical park identification, and strengthening environmental standards constraints and raising the funding threshold. Promote reform of the petrochemical and chemical industries. Constrained by various factors such as environmental protection policies and funding, the growth rate of fixed asset investment in the chemical industry has been at a low growth rate or even negative growth since 2016.

 Data source: Wind, Bloomberg, CICC, etc.

Since 2016, the competitive landscape of China's chemical industry has been optimized. Capital expenditures of listed chemical companies are growing rapidly, and leading listed companies are attracting more social capital to join due to their higher environmental protection and safety capabilities and ample cash flow support. The accelerated growth rate of capital expenditure of leading companies and the obvious trend of concentrating industry resources to leading companies have led to the expansion of product capacity of leading companies. Combined with the gradual elimination of most of the industry's outdated production capacity, the concentration of the chemical industry has increased, and the industry's competitive landscape has been optimized.

We have compiled data on the capacity share of the top five companies in the Chinese market for 18 chemicals in 2016 and 2020, and the industry concentration of most chemicals such as DMF, silicones, adipic acid, spandex and viscose staple fiber will increase significantly in 2020.