There Was A Period of Loss Last Year, And PP Has Increased Its Production Capacity by 8.83 Million Tons This Year!

On April 18, Zhongjing Petrochemical's 1.2 million ton/year copolymerized polypropylene plant was handed over, which will be the largest production base of propylene and polypropylene in the world. Zhu Zebin, general manager of Fujian Zhongjing Petrochemical Co., Ltd., said that in the next 3 to 5 years, Zhongjing Petrochemical will achieve a production scale of 3 million tons of propylene and 3.5 million tons of polypropylene, making it the largest production base in the world.

It is reported that Zhongjing Petrochemical is an extra-large chemical industry chain enterprise that imports propane-propane dehydrogenation-propylene-polypropylene chemical raw materials and BOPP plastic film products. At present, the total investment of the first-phase project in Zhongjing Petrochemical Science and Technology Park is 18 billion yuan, and the output value will reach 30 billion yuan; the total investment of the second-phase project under construction is 16 billion yuan, and the total output value is 70 billion yuan. It has been approved to be completed and put into production; the third phase of the project uses hydrogen by-product as raw material to extend the industrial chain, with a total investment of 18 billion yuan and an output value of 50 billion yuan. All projects will be put into operation in 2024. During the "14th Five-Year Plan" period, the output value of the entire industrial chain of Zhongjing Petrochemical Science and Technology Park is expected to reach 100 billion yuan.

Drawing injection molding is still the main downstream demand for polypropylene

Polypropylene in my country is mainly used in the production of woven products, film products, injection products, textile products, etc., and is widely used in packaging, electronics, and home appliances, automobiles, fibers, construction pipes and other fields.

From the perspective of the downstream demand structure of polypropylene, drawing injection molding is still the main downstream demand for polypropylene, of which drawing accounts for 33%, copolymer injection molding accounts for 22%, homopolymer injection molding accounts for 14%, and fiber accounts for 11%. From the perspective of end products, wire drawing products are mainly used in the packaging of food, fertilizer and cement, etc., injection products are mainly used in small household appliances, daily necessities, toys, washing machines, automobiles and turnover boxes, BOPP film products are mainly used in food packaging field.

In 2022, domestic polypropylene production capacity will exceed 40 million tons per year for the first time

Since 2019, my country's polypropylene has ushered in a new round of capacity expansion: 2.17 million tons/year of new production capacity in 2019; 4 million tons/year of new production capacity in 2020; 3.3 million tons/year of new production capacity in 2021.

In 2021, the total global polypropylene production capacity will reach 102.809 million tons/year, and the production capacity will increase by 8.135 million tons/year, a year-on-year increase of about 8.59%. Among them, the total production capacity of polypropylene in Northeast Asia is 49.529 million tons/year, and my country occupies 35.9 million tons/year (excluding some batch process small body devices). It is expected that domestic polypropylene capacity expansion will accelerate in 2022.

According to statistics, 23 sets of polypropylene plants are planned to be put into operation in my country in 2022, with a total new capacity of 8.83 million tons/year. By the end of the year, the total domestic polypropylene production capacity will exceed 40 million tons/year for the first time. It is expected that in 2023, the new domestic polypropylene production capacity will continue to advance by leaps and bounds. In view of the relatively stable growth of demand, the rapid growth of production capacity will lead to overall overcapacity of polypropylene, and the competition of polypropylene enterprises will be more intense.

Under the height of involution, how can polypropylene enterprises seek development?

The development of my country's polypropylene industry is still hampered by the fact that it is large but not strong, especially the lack of globally competitive products, the dependence on imports of high-end polypropylene materials is still high, and the short-term import volume continues to maintain a certain scale. In 2021, some polypropylene production enterprises in my country will experience periodic losses. This is also the initial manifestation of the imbalance between supply and demand in the industry, and the result that the rising cost of raw materials cannot be effectively transmitted. Therefore, my country's polypropylene needs to increase its R&D and production of high-end products, and benchmark products with global competitiveness. While squeezing the import share, continuing to expand the export volume of polypropylene can directly and effectively resolve the pressure of excess supply.

At present, polypropylene enterprises have responded to the increasingly fierce competition in the following ways:

Upgrade scale

Donghua Energy has an in-depth layout in Daxie and Maoming, Zhongjing Petrochemical Co., Ltd. has put into production 1.2 million tons/year of polypropylene copolymer, and Zhejiang Petrochemical’s polypropylene scale has reached 1.8 million tons/year. Baofeng Energy's Ningdong Base and Ordos Base will be constructed at two points. It has become the first choice of many enterprises to reduce comprehensive production costs through large-scale production.

Develop exports

In 2021, China's polypropylene export volume will increase by 227.24% year-on-year to 1.3911 million tons, easily exceeding 1 million tons per year. It is not ruled out that it will be affected by the fluctuation of the epidemic, including factors such as limited ocean shipping capacity and rising freight rates. The export volume will reach 1.3 million tons/year, the import volume will be less than 5 million tons, and the domestic market demand gap will be reduced to less than 4 million tons/year. With the continuous expansion of domestic polypropylene capacity from 2022 to 2023, the competition in my country's polypropylene industry during the "14th Five-Year Plan" will shift from a stage of excess to an absolute excess. The choice of propylene companies.

Develop more high-end products

At present, the mainstream development directions of domestic polypropylene special materials are automobiles, home appliances, medical syringes, medical infusion bags, medical nursing pads, medical protective clothing, medical consumables, home improvement building materials, daily household storage, food and drug packaging, electronic packaging materials, etc. The high-end development direction of domestic polypropylene mainly includes metallocene polypropylene, high melt strength polypropylene, foamed polypropylene, high transparency polypropylene, "three high and two low" polypropylene, low ash thermoforming polypropylene, high crystalline polypropylene Polypropylene, ultra-high molecular weight polypropylene, high gloss polypropylene, low shrinkage polypropylene, antibacterial polypropylene, etc.

Bundle R&D and production with downstream customers

Well-known leading companies such as Sinopec, PetroChina and Wanhua Chemical have basically formed a model of jointly developing new polyolefin products with downstream customers. According to customer needs, improve product indicators and increase the stability of product quality, increase customer stickiness, and form effective profits. Some private enterprises are trying to open up the whole industry chain model of upstream and downstream. For example, Zhongjing Petrochemical is building a whole industry chain model from propane, propylene, polypropylene, and polypropylene films; Hongji Petrochemical is building propane, propylene, polypropylene, meltblown The whole industry chain model of materials and masks; Kingfa Technology is also building a whole industry chain model of propane, propylene, polypropylene, polypropylene modified/meltblown materials.