November 04, 2024 – China’s ethylene industry has emerged as a global leader, with its capacity accounting for half of Asia’s total and surpassing the United States to rank first worldwide in 2022. Looking ahead, the country’s ethylene capacity is projected to surge by 80% to reach 83.87 million tons per annum by 2030, accounting for 58% of the global new capacity additions. This growth is fueled not only by the aggressive expansion plans of domestic chemical companies but also by the rapid development of the new materials sector, which presents new demand growth points and profit enhancement opportunities for the ethylene industry.
In recent years, China’s ethylene industry has achieved remarkable success in cost control. Compared to older international capacities, domestic new ethylene capacities boast multiple advantages, including technological advancements, the application of Industry 4.0, lower raw material costs, and shorter maintenance cycles for new equipment. According to Color Master batch Industry Network, with Brent crude oil priced at 65 per barrel,the average cash cost of ethylene in China has dropped to approximately 760 per ton, positioning it roughly in the middle of the global cost curve. As in-progress capacities are gradually released and older capacities are phased out and upgraded, China’s ethylene industry is poised to further establish its cost advantage in global competition.
The global ethylene capacity landscape is undergoing profound changes. North America and Europe have witnessed a significant slowdown in ethylene capacity growth, while the Middle East maintains a stable but similarly decelerating growth rate. In contrast, China’s ethylene capacity growth remains robust, not only dominating half of the Asian market but also steering the direction of ethylene industry development worldwide. Behind this growth is the deep layout and active exploration of the new materials sector by Chinese chemical companies. As an important development direction for the ethylene industry, new materials are gradually driving the transformation of ethylene downstream products towards refinement and high-end applications.
Notably, China’s ethylene industry has also made significant breakthroughs in crude oil-to-chemicals production. Through technological innovation and process optimization, the chemical yield of domestic crude oil-to-chemicals projects has reached or even exceeded 50%, far surpassing the international average. This achievement not only shortens production processes and reduces production costs but also helps reduce carbon dioxide emissions, contributing to the green and sustainable development of the petrochemical industry.
Furthermore, coal-to-ethylene, a distinctive feature of China’s ethylene industry, has demonstrated strong competitiveness. With the gradual emergence of scale effects and continuous advancements in carbon reduction technologies, the cost advantage of coal-to-ethylene has become increasingly apparent. Especially during periods of volatile crude oil prices, coal-to-ethylene, with its strong resistance to raw material price fluctuations, has become an important component of the domestic ethylene industry.
In summary, China’s ethylene industry is entering a new stage of development. With comprehensive efforts in cost control, technological innovation, new materials layout, and crude oil-to-chemicals production, China’s ethylene industry is poised to occupy a more favorable position in global competition and contribute more to the sustained and healthy development of the petrochemical industry.