China's polypropylene production capacity analysis and the future development trend of the industry

For a long time, the polypropylene industry has had the largest production capacity of Sinopec and PetroChina. In recent years, with the development of process technologies such as methanol-to-olefins process and propane dehydrogenation, the sources of propylene for polypropylene have become diversified. With the intervention of a number of private or joint venture capital, the structure of Chinese polypropylene production enterprises has changed. big change.

1. Production capacity of polypropylene
With the rapid development of polypropylene applications, major companies have expanded their polypropylene production capacity. According to statistics, from 2014 to 2018, the production capacity of China's polypropylene industry showed a growth trend. As of the end of 2018, China's polypropylene production capacity reached 22.58 million tons per year, with a compound annual growth rate of 8.2% from 2014 to 2018.

From the perspective of polypropylene sources, oil-based polypropylene accounts for about 57%, coal-to-olefins accounts for about 26%, propane dehydrogenation accounts for about 10%, and methanol-to-olefins accounts for about 7%. At present, the situation of diversification of raw materials for production of polyolefin plants and triad of production processes is becoming more and more obvious.

China's polypropylene industry is showing a trend of continuous expansion and rapid development. Due to the increasing uncertainties of the domestic and international macroeconomic situation and the diversification of raw material sources, competition in the polypropylene industry has intensified. Chinese polypropylene companies increase the added value of polypropylene products by developing high-end polypropylene special materials, such as polypropylene for high-melting fibers and polypropylene for thin-wall injection molding, to ease the inventory of low-end polypropylene products and enhance their competitiveness.

At present, the total domestic production capacity and total output of polypropylene are both lower than the apparent consumption, and high-end materials are still highly dependent on imports. With the release of new domestic production capacity and the diversification of production technology routes in the next two years, supply and demand will tend to balance in the future. The competition of polypropylene ordinary materials will become fierce, and the development of high-end special materials to meet the needs of consumption upgrades is the future development trend of the industry.

According to public information, from 2019 to 2020, China's new polypropylene production capacity will reach more than 14.1 million tons. At present, the total production of China's chemical industry accounts for 40% of the global total, and it will reach 49% by 2030.

Among the newly added capacity of polypropylene, the new capacity in East China accounts for the largest proportion. It is estimated that the newly added capacity will reach 5.8 million tons in 2019-2020, accounting for 41%, followed by Northeast China, accounting for 16%.

2. Development trend of polypropylene industry
1) The expansion of China's polypropylene market capacity is affected by the continuous growth of downstream demand. In the next few years, China's polypropylene production capacity will maintain a substantial expansion trend.
2) Cost control and high-end polypropylene technology determine the profitability of enterprises. In the future, China's polypropylene self-sufficiency rate will continue to increase, but the new production capacity will still be mainly homogenized and low-end general-purpose materials. High-end polypropylene with unique properties is still in short supply, such as transparent polypropylene, thin-wall injection molded polypropylene, and high melt strength polypropylene. Advanced management system and operating level, leading process technology, and stable raw material supply factors will determine the profitability of polypropylene product manufacturers.
3) Industrial upgrading and policy orientation drive the upgrading of polypropylene product structure

Affected by the development of express delivery, food delivery and other industries brought about by the "Internet +" era, the upgrading of medical conditions, the transformation and upgrading of traditional home appliance industry and other factors, the demand for high-end polypropylene products is growing rapidly, such as thin-wall injection molding, fiber products, and high transparency Polypropylene, special materials for household appliances and pipe sheets will become the main growth drivers of the polypropylene industry in the future. In addition, active industrial policies such as automobile lightweight policies have also promoted the development of the polypropylene industry.