Yulong Petrochemical’s 100,000-ton MMA Project Comes Online Amid a “Deep V-Shaped Rebound” — Opportunity or Hidden Risk?

In mid-March 2026, major news emerged from Yulong Island in Yantai, Shandong: the 100,000 tpa methyl methacrylate (MMA) unit—part of Phase I of the Yulong Petrochemical Refining and Chemical Integration Project—has successfully started up in one go and produced on-spec products.

This key supporting project, with an investment of nearly RMB 1.6 billion, comes online at a sensitive moment when the domestic MMA market is experiencing a sharp “deep V-shaped rebound.” Does its entry capture a high-price window, or does it exacerbate concerns about overcapacity?

Project Positioning: Unlocking the “Bottleneck” Between Refining and High-End Materials

The MMA project, based on the acetone cyanohydrin (ACH) process, is located on Island 2 of the Yulong Petrochemical Industrial Park. It relies primarily on hydrogen cyanide supplied by the park’s acrylonitrile unit under construction.

Once completed, its main product—MMA (approved capacity: 84,000 tpa)—serves as a key raw material for high-end PMMA (polymethyl methacrylate), widely used in optical lenses, automotive lighting, and electronic displays.

The project’s launch marks an initial step for the Yulong Island complex in extending from basic refining into downstream high-value advanced materials.

Market Landscape: Capacity Expansion and Intensifying Regional Competition

Yulong’s MMA start-up occurs against the backdrop of continuous domestic capacity expansion.

As of December 2025, China’s MMA capacity reached 2.855 million tpa, making it the world’s largest producer. Another 300,000 tons of new capacity is expected in 2026, with Yulong’s 84,000 tons being a key addition.

Capacity distribution is highly concentrated, with East China and North China accounting for 63.47% of total capacity. Located in Shandong, Yulong will likely target the core East China market, competing directly with established players such as Chongqing Yixiang and Jiangsu Sailboat (Styrong/Sailboat Petrochemical).

Price Window: Rapid Rebound Driven by Geopolitical Disruptions

The timing of Yulong’s start-up coincides with a favorable pricing window.

China’s MMA prices fell to RMB 8,950–9,500/ton in late October 2025 after a prolonged downturn. However, by March 2026, prices surged rapidly, reaching RMB 13,450/ton in East China as of March 18.

This sharp rise is partly attributed to geopolitical tensions in the Middle East, which disrupted shipments from Saudi Arabia and reduced import expectations, tightening supply.

For Yulong, the current high-price environment helps offset the costs associated with ramping up a new facility.

Short-Term Concerns: Supply Growth May Pressure Prices

Despite the upbeat market, risks remain.

Yulong’s additional 84,000 tpa supply may put downward pressure on spot prices. Although the output targets high-end PMMA materials, supply growth in the short term may outpace demand, creating bearish pressure.

The project also produces 180,500 tpa of ammonium sulfate as a by-product, which could intensify price competition in a relatively stable demand market.

From a supply-demand perspective, China’s MMA output is expected to rise to 1.82 million tons in 2026, with total supply up 19% year-on-year. Meanwhile, downstream consumption is projected to exceed 1.4 million tons, with demand growing by 11%. The faster growth in supply suggests potential downward price pressure in the medium to long term.

Strategic Game: Private Refiners Compete in High-End Materials

Yulong’s entry marks a new phase of competition among private refining giants in the high-end materials sector.

In 2026, only two major MMA capacity additions are expected: Yulong Petrochemical (84,000 tpa) and Zhejiang Petrochemical (200,000 tpa), totaling 284,000 tons. Both projects are not only closely timed but also strategically aligned.

Zhejiang Petrochemical is building downstream PMMA capacity of 180,000 tpa, forming an integrated “MMA-to-PMMA” value chain. Yulong is pursuing a similar strategy, leveraging its integrated complex to target high-end optical materials.

According to the Longkou municipal government report, the region is accelerating projects such as Shanneng New Materials and Yulong PMMA to seize the high-end segment of the petrochemical industry.

Ultimately, the real significance of Yulong’s move lies not in its 84,000 tons of MMA capacity, but in whether it can use this as a stepping stone to drive breakthroughs in high-end materials across Shandong and northern China.