- Three stages of the overall development of chemical industry in China
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Disorderly Development, Tend to be the leading companies, and Scaling up
During 2011-2015, the number of chemical companies continued to increase due to the rapid growth of bank credit scale as well as the relatively low entry barrier of the chemical industry. From 2016 to the present, the number of chemical companies has been decreasing due to the gradual elimination of backward production capacity in the chemical industry under relevant policies in China, while environmental protection and safety policies, investment scale have raised the barriers to industry entry.MORE
Stage One
2011-2015 : Rapidly & Disorderly Development
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The number of chemical production enterprises increased significantly during 2011-2015, and the rapid growth of fixed asset investment in the industry led to rapid expansion of chemical production capacity. According to the National Bureau of Statistics of China, the growth rate of fixed investment in chemical raw materials and chemicals in China from 2012-2015 was 31%, 17%, 11% and 3%, respectively. At the end of 2015, the number of chemical raw materials and chemicals manufacturing enterprises in China was nearly 25,000, an increase of 16.5% (+2,342) from the beginning of 2011.ENTER
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![Number of enterprises in China's chemical raw materials]()
Stage Two
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By Market Capitalization
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≥30 billion yuan
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10-30 billion yuan
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5-10 billion yuan
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＜5 billion yuan
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Accelerated growth of leading chemical companies in China
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Profitability of leading companies further enhanced
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The production cost of the leading enterprises is relatively stable based on their high environmental protection and safety capability, engineering capability, the advantages of a well-integrated industrial chain, and better cost control capability.MORE
![Number share and capital expenditure share of chemical companies by market capitalization]()
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The widening cost gap between the leading enterprises and small capacity chemical enterprises leads to a gradual steepening of the chemical production cost curve and further enhancement of the profitability of the leaders.MORE
![Relatively fast revenue growth of leading Chinese chemical companies after 2016]()
Stage 3: Becoming Global Majors
Major Chinese chemical companies have plans for large-scale capital expenditures in the next 3 years, and we expect leading companies to accelerate growth and promote industrial transformation & upgrading.
Strong Core Competitive Advantages
Chinese chemical companies have a high historical return on investment.
Based on product advantages, industry chain integration and engineering capabilities under the cost advantage, scale advantage, etc., polyurethane, coal chemical, titanium dioxide, pesticides, dyestuff, food and feed additives and other chemical industry segments of China's leading companies with stronger earnings. 2016-2019 ROE and ROIC and other indicators ahead of the average level of listed chemical companies, some companies' earnings indicators far exceed the average level of listed companies .
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＞＞Experience it now! 200+ Chemicals for You ![On March 31 2021, China approved the restructuring of Sinochem and ChemChina]()
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On March 31, 2021, China approved the restructuring of Sinochem and ChemChina
“Although China has become the world’s biggest manufacturer and consumer of chemicals, it has not developed a multinational chemical giant like BASF or Dow. Sinochem would like to play that role.”The total combined assets are valued at $245 billion. The merged company's leading business will be chemicals.
In chemical industries such as MDI, TDI and PTA, large enterprises dominate due to high technological threshold, or few enterprises in the industry and large market share of leading enterprises, which directly affects their production and price to the market situation. These include some Chinese leading enterprises.
- MDI
- TDI
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Wanhua, BASF, Crestron account for 64% of total capacity
MDI is a highly concentrated product with high technical barriers. 2020, the global MDI production capacity has reached 9.49 million tons, and the top three global suppliers account for 64% of the total global production capacity, in order of Wanhua Chemical, BASF, and Costron. Wanhua Chemical MDI capacity reaches 2.6 million tons/year, BASF MDI capacity is 1.92 million tons/year, accounting for 20.23%, and Costron capacity is 1.57 million tons/year, accounting for 16.54%. -
BASF, Kostron, Wanhua and Yantai Juli account for 73% of the total production capacity
In 2020, the total global production capacity will be 3.503 million tons, and BASF TDI capacity will be 860,000 tons/year. Crestron TDI capacity is 810,000 tons/year. Wanhua Chemical TDI production capacity of 650,000 tons/year. Yantai Juli TDI production capacity of 230,000 tons/year, the above are the industry production capacity of the first four tdi production enterprises.
Global New MDI Capacity Concentrated to Wanhua
Wanhua Chemical completed the technical reform and capacity expansion in Yantai Park at low cost, and the leading position of MDI is further stabilized, and the focus of new production capacity in the next three years is still Wanhua. 2021 Wanhua announced the completion of the technical reform and capacity expansion of MDI plant in Yantai Chemical Park on February 25, 2021, from the original 600,000 tons/year to 1.1 million tons/year, and the low-cost expansion further enhances the cost advantage and stabilizes the leftmost end of the cost curve. After the technical reform, Wanhua's global production capacity will total 2.6 million tons, with a market share of 27.3%. In the next three years, except for Covestro Caojing, which will have a new capacity of 50,000 tons/year in 2021 to break the bottleneck, there is no other expansion plan for overseas enterprises before 2024; while Wanhua Ningbo Park's 300,000 tons/year technical reform capacity and Fujian Park's 400,000 tons/year new capacity are expected to reach production around 2023/2024 and will be put into operation depending on market demand.In 2021, China's TDI design capacity will be 1.39 million tons, and in 2020, China's TDI output will be 1.0813 million tons, an increase of 553,000 tons or 104.79% compared with 2011, with an average annual growth rate of 22.75%.
Titanium Dioxide
Since 2010, the main new global titanium dioxide production capacity is concentrated in China, and the new global titanium dioxide production capacity is concentrated to the leading Chinese enterprises.
Lomon Billions is the only enterprise in China that has mastered the large boiling chloride titanium dioxide production technology, and currently has a capacity of 1.01 million tons of titanium dioxide / year, we expect the company's Jiaozuo Phase II Line 3 100,000 tons / year titanium dioxide chloride production capacity is expected to be put into operation at the end of 2021, Yunnan base 200,000 tons / year titanium dioxide production capacity is expected to be put into operation at the end of 2022, the company plans to 14 Five-Year Plan period CNNC mainly focuses on sulfuric acid production capacity, and currently has 330,000 tons/year of crude titanium dioxide production capacity and 400,000 tons/year of finished titanium dioxide production capacity, and the company plans to continue to expand its crude and finished titanium dioxide production capacity.
- PTA
- Adipic Acid
- DMC
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PTA: Hengli Petrochemical, Rongsheng Petrochemical, Hengyi Petrochemical, FJPEC, Xin Feng Ming accounted for 71.85% of the total capacity.
In 2020, China's PTA capacity is 50.62 million tons/year, 11.6 million tons/year for Hengli Petrochemical, 7.04 million tons/year for Rongsheng Petrochemical, 8.83 million tons/year for Hengyi Petrochemical, 4.5 million tons/year for FJPEC, and 4.4 million tons/year for Xin Feng Ming. -
Adipic Acid: Huafon Chemical, Shenma, Jiangsu Haili, Shandong Haili, Hualu Hensheng accounted for 77.6% of total capacity
As the development of adipic acid process in China continues to mature and the cost advantage is gradually reflected, China has become the world's largest producer of adipic acid with a production capacity of about 2.655 million tons, which has accounted for 54% of the world. Currently, the top five production capacities in China's adipic acid industry account for 77.6%: Huafon Chemical (23.5%), Shenma (28.9%), Jiangsu Haili (11%), Shandong Haili (8.3%), and Hualu Hensheng (5.9%). -
DMC: Hoshine Silicon, BLUESTAR, Wacker Chemie AG, XinAn Chemical, Dongyue accounted for 60.01% of the total production capacity
The total global DMC monomer capacity is about 5.535 million tons/year, and the capacity of the five largest companies in the world accounts for about 46% of the total global DMC monomer capacity.
China is the world's largest chemical market, but in 2019, only 6 Chinese companies are among the top 50 chemical companies in global chemical sales. This is a shortcoming but also an opportunity for the development of China's chemical industry. We believe that with China's huge chemical market volume, there will be a group of excellent Chinese chemical companies rising to become the leading global chemical companies in the future.