Status Quo and Development of Chemical Industrial Parks in China

More than 600 chemical industry parks are facing rectification and closure, and new chemical industry parks are banned in many provinces.

Since the strict inspection of environmental protection and frequent chemical accidents, various regions in China have carried out comprehensive rectification on all chemical industry parks and chemical enterprises within their jurisdiction. For example, Yancheng in Jiangsu Province is going to eliminate all chemical zones in the region, and Jiangsu Province requires the number of chemical industry parks to be reduced to 20. Henan Province halts the approval of building new chemical industrial parks, chemical projects, etc. China is almost shadowed by the aftermath of chemical accidents.

Several Chinese provinces have begun shutting down chemical industry parks. The “free-of-pollution” requirements of the retained chemical park will be further improved. Enterprises not in the park will be checked, and those in the park will have to improve the intensity of environmental protection supervision. More than 600 chemical parks are facing closure.

Here comes the reform period of chemical industry.

In the medium and long term, it is more difficult for new chemical projects to get approved. In the future, the investment rate of new chemical production capacity will slow down significantly, which will prolong the business cycle of the domestic chemical industry, weaken the periodicity of the chemical industry, and bring long-term investment value to the chemical industry.

Currently, China cannot get away from its dependence on the chemical industry.With the emergence of more “non-chemical zones” in eastern provinces, the chemical industry will have to move to Inner Mongolia, Xinjiang, Ningxia and other regions with strong environmental carrying capacity in the northwest, and some chemical companies may even move abroad. This is expected to reshape the cost curve for some chemicals and change the competitive landscape in some segments of the industry.Leading enterprises with outstanding advantages in technology, scale, safety and environmental protection will benefit a lot in the future consolidation period. Chemical enterprises with extended industrial chain layout will gain a solid competitive advantage and break the development bottleneck.They can deepen competition barriers to the upstream layout and provide raw material cost advantages, while also distribute products to the downstream and get higher profit by closing to the terminal.

In the future, chemical industry parks will become “rare and popular resources”. The expansion of small-scale enterprises will be greatly restricted, and China’s domestic chemical market will be highly concentrated.