In October, Borouge 4 officially reached full-capacity operation in Ruwais, UAE, adding 1.4 million tonnes/year of polyethylene capacity. Total polyolefin capacity at the Ruwais site has reached 6.4 million tonnes/year, making it the world’s largest single-site polyolefin production base.
A 100,000 tonnes/year cross-linked polyethylene (XLPE) unit was commissioned at the same time, doubling the Ruwais site’s total XLPE capacity to 200,000 tonnes.
Borouge’s products are mainly directed to Asia and Europe. From the second half of the year, it has continued to supply low-cost polyethylene cargoes to China and Southeast Asia.
This is happening in a market environment that appears completely opposite in one direction.
China is reducing imports and increasing exports, while Borouge is adding capacity and betting on Asia
From January to July 2026, China imported 5.52 million tonnes of polyethylene, down 2.5 million tonnes year on year; exports reached 2.05 million tonnes, up 1.44 million tonnes year on year. Import dependence fell to about 25%, and domestic self-sufficiency has risen to more than 80%.
The share of Middle Eastern cargoes in China’s polyethylene imports fell from 54% in 2021 to 39% in 2026.
China is transforming from the world’s largest polyethylene import market into a country with rapidly rising exports. Borouge, however, is running at full capacity at this very moment, with new supply flows pointing directly at China and Southeast Asia.
This appears to be a mismatch—China increasingly does not need imports, while Borouge is increasingly dependent on exports—but what Borouge values is that even after China’s self-sufficiency exceeds 80%, it still needs to import some polyethylene that is cheaper than domestic high-cost plants.
Commodity grades compete on cost
Oil-based routes account for nearly two-thirds of China’s polyethylene capacity. In Q3 2026, the average gross margin for gas-based ethylene was about RMB 2,440/tonne, while that for oil-based ethylene was minus RMB 757/tonne. The raw material cost of oil-based polyethylene is driven by crude oil prices; among existing plants, the smaller-scale ones lacking integrated supporting facilities find it hard to lower their cash costs.
Borouge’s feedstock is ethane, supplied by affiliated ADNOC sources. Ethane-based ethylene production in the Middle East costs about RMB 2,000/tonne less than China’s mainstream oil-based route, giving exports to the Far East market strong price competitiveness.
The impact of Borouge’s full 6.4 million tonnes/year operation on the Chinese market is selective. What it replaces is not all of China’s polyethylene capacity, but the portion at the far right of the cost curve. China’s continued rise in self-sufficiency relies on newly added coal-based, light hydrocarbon and integrated capacity. But the high-cost oil-based plants in the existing stock will not automatically gain cost competitiveness just because the self-sufficiency figure improves.
XLPE targets technology
In addition to polyethylene, the 100,000 tonnes of XLPE commissioned by Borouge at the same time targets another gap. China’s annual consumption of cable compounds for 110 kV and above high-voltage cables is about 100,000 tonnes; the localization rate of XLPE insulation compounds for 220 kV and above extra-high-voltage cables is below 10%, and the high-end market has long been dominated by overseas companies. Wanhua Chemical completed a 45,000 tonnes/year XLPE project in September 2026, and localization is advancing, but large-scale substitution still takes time. Borouge’s Borlink™ XLPE has completed type tests and prequalification tests for 750 kV cables with Chinese customers, targeting ultra-high-voltage transmission, deep-sea offshore wind and long-distance submarine cable projects.
The competitiveness of Borouge’s new capacity is reflected both in the raw material cost of commodity polyethylene and in the technical accumulation of high-voltage cable compounds. China’s rising polyethylene self-sufficiency does not mean all products can dispense with imports. Facing continued global polyethylene capacity expansion, domestic industry must not only cope with cost competition in commodity grades but also fill the shortfall in high-end product supply.
