China's polyethylene supply and demand situation is changing rapidly

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Polyethylene has always been one of the major chemicals imported in China. Since imported materials accounted for half of the polyethylene market last year, fluctuations in international prices have had a significant impact on changes in the domestic polyethylene market. When the crude oil price in the international market soared to nearly 80 US dollars per barrel, the average price of domestic polyethylene also historically soared to more than 13,500 yuan per ton. However, with the successive production of new domestic production capacity, the supply and demand situation of polyethylene in China will change, and the era of imported materials accounting for half of the country will soon come to an end.
Overseas countries are targeting the Chinese market. China's imports of polyethylene come mainly from South Korea, Saudi Arabia, Singapore, and India, with South Korea accounting for the largest proportion. In recent years, polyethylene produced in Middle East countries such as Saudi Arabia and India has increased its export volume year by year due to its highly competitive production costs, and it has occupied a large market share in China's market; Thailand, Malaysia, Russia and other neighboring countries in recent years The company is also expanding its polyethylene production facilities on a large scale. In addition to satisfying their domestic demand, it is mainly exporting to China. It is expected that in 2010, the Middle East will become the world's largest exporter of polyethylene.
At present, China has become the main battlefield for the competition of polyethylene suppliers in the world. Domestic demand for polyethylene products is huge. Among the countries in the world, the fastest growing demand for polyethylene is China. It is predicted that the average annual growth rate in China before 2010 will be 9.7%. In the past 10 years, the development of China's petrochemical industry has been advancing by leaps and bounds, and the polyethylene production capacity has been severely deficient. The domestic and foreign polyolefin giants have therefore invested in expanding production, which has greatly increased China's polyethylene production capacity. In the past five years, China’s annual polyethylene production capacity has increased from about 3 million tons to 6 million tons, but it still cannot meet the strong demand in the domestic market. Therefore, the import volume also increases at the same time. In 2006 alone, the import volume reached 6.23 million tons. About 55% of domestic consumption.
The competitiveness of domestic goods needs to be improved. The reason why imported materials can occupy a large share in the domestic polyethylene market is because there is still a big gap between China's polyethylene production and foreign countries. On the one hand, the domestic equipment is small in scale, with high material consumption and high energy consumption. The annual production capacity of a single unit in foreign countries is generally 300,000 to 400,000 tons, compared with 200,000 tons at present in China, and only tens of tons for many installations; the material consumption and energy consumption of polyethylene installations in China are also higher than in foreign countries, resulting in High production costs and lack of competitiveness.
On the other hand, there are fewer varieties in the product structure and the proportion of high-grade products is low. It is reported that Japan can produce 793 high-density polyethylene and 2,540 low-density polyethylene grades. In China, there are few polyethylene brands, and most of them are general-purpose materials that can only be used for general purposes. Most high-grade special materials need to be imported from abroad, such as special materials for pipes, wire and cable special materials, special materials for automobile fuel tanks, and large hollow containers. Material and so on.
In addition, the concentration of polyethylene companies is relatively poor, productivity is decentralized, and the degree of specialized production is low, resulting in irrational resource allocation and restricting the ability of independent innovation and competitiveness of enterprises.
New capacity to make up for domestic shortfalls In recent years, China's polyethylene production capacity has grown dramatically, with an increase of 1.55 million tons last year alone. During the “Eleventh Five-Year Plan” period, a batch of ethylene plants will be built, rebuilt and expanded in China to form several million-ton-class ethylene production bases. The production capacity of polyethylene will be further expanded accordingly.
The ones currently reported to the newspapers that have already started and will be put into production by 2009 include Tianjin Petrochemical's one million tons of ethylene in 600,000 tons of polyethylene, Zhenhai's one million tons of ethylene in 450,000 tons of polyethylene, and Dushanzi. 1.2 million tons of polyethylene in the petrochemical 1.2 million tons of polyethylene, polyethylene 800,000 tons in the million tons of ethylene in Fushun Petrochemical.
It is estimated that by 2010, the annual capacity of newly added polyethylene in China will be more than 7 million tons, domestic production capacity is expected to be 11 million tons, and production is expected to be 8 million to 10 million tons.
As domestic production capacity continues to grow, foreign manufacturers are rushing in, so downstream demand, although growing, does not necessarily keep up with supply growth. The situation of supply and demand for polyethylene in China is likely to shift from a tight supply to a balance, and even to a gradual surplus. The era of imported materials that account for half of the country’s imports will also be gone. This also means that the market competition will become more intense. In the face of severe challenges, the polyethylene producers must only carry out reforms, reforms, and restructurings, and accelerate the adjustment of the industrial structure. While maintaining a modest increase in total production, they should focus on improving the polyethylene products. The content of science and technology, increase the proportion of high-grade special materials, and provide diversified products with high quality and low price can only survive and develop.

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