October 25, 2024 – China’s ethylene production capacity has been on a steady growth trajectory, solidifying its position as a key player in the global market. In 2022, China surpassed the United States to become the world’s largest ethylene producer, with its capacity accounting for over 50% of Asia’s total. Looking ahead, China’s ethylene production capacity is projected to expand further, reaching 83.87 million tons per year by 2030, an 80% increase, and accounting for 58% of the global newly added capacity.
The rapid development of China’s ethylene industry is attributed not only to the vast market demand but also to chemical companies’ strategic layout in the field of new materials. New materials have emerged as a significant growth direction for the ethylene industry, with downstream products transitioning towards refinement and high-end applications. According to statistics, in 2022, China’s existing ethylene production capacity was approximately 43.767 million tons per year. Among the announced projects, China’s ethylene capacity is expected to reach 83.87 million tons per year by 2030. Major players such as Rongsheng Petrochemical, Hengli Petrochemical, Dongfang Shenghong, and Satellite Chemical are actively expanding their downstream new material capacities, aiming to achieve technology-driven domestic substitution and further enhance profitability.
According to AsiaMB’s understanding, compared to older international capacities, China’s new ethylene capacities exhibit notable advantages in several aspects, including lower operating and raw material costs, as well as shorter maintenance periods for newer equipment. These advantages are gradually giving China’s ethylene industry a cost edge in global competition. Particularly with Brent oil prices at 65perbarrel,theaveragedomesticethylenecashcostisabout760 per ton, positioning it roughly in the middle of the cost curve. As domestic capacities under construction come online and older capacities are phased out, China’s overall ethylene production capacity is expected to become even more competitive in the global market.
Moreover, the global ethylene production landscape is undergoing profound changes. North America’s total ethylene capacity and the U.S. ethylene capacity growth are both slowing down. Middle Eastern ethylene capacity remains stable but with significantly reduced growth rates. European ethylene supply continues to be subdued due to weak downstream demand growth, high costs, and excessive regulation. In contrast, China’s ethylene industry is thriving, with not only increasing production capacity but also active expansion into new material fields, injecting new vitality into the industry’s sustained development.
Notably, the production of chemicals from crude oil (COTC) has emerged as a new growth direction for China’s petrochemical industry. Directly producing olefins, aromatics, and other chemicals and petrochemical products from crude oil can effectively enhance crude oil utilization and added value. Currently, China’s COTC projects have reached the second generation and are actively breaking through the third-generation technology, aiming to increase chemical production to over 70%. The breakthrough and application of this technology will open up new growth opportunities and development spaces for China’s petrochemical industry.
Overall, China’s ethylene industry is poised to further enhance its global market position, with sustained capacity growth and more breakthroughs and progress in the fields of new materials and COTC. These efforts will contribute to the sustained and healthy development of China’s ethylene industry and make positive contributions to the stability and prosperity of the global ethylene market.