Analysis of China's Ethylene Industry       

1. Current Situation and Prediction of China's Ethylene Supply and Demand   

(1) China's ethylene production status   
   
In 2008, China's ethylene production capacity was 9.98 million t/a. High oil prices in the first half of the year and the economic crisis in the second half restrained China's demand for ethylene in downstream sectors, and China's ethylene output in 2008 was 10.256 million tons, slightly down 2.1% year on year. "The Adjustment and Stimulus Program of the Petrochemical Industry" released in May 2009 has stimulated the development of the ethylene industry. In the first eleven months of 2009, China's ethylene output was 9.507 million tons, up 3.6% year on year. China's ethylene capacity is projected to reach 16.4 million t/a in 2010.
   As of November 2009, there are 23 ethylene producers with 25 sets of ethylene production units in China, of which six have a single-set capacity of no less than 800 000 t/a and their total capacity was 5.69 million t/a; eight have a single-set capacity of no less than 600 000 but less than 800 000 t/a and their combined capacity was 5.38 million t/a, and the remaining are small and medium ethylene units with single-set capacity of less than 600 000 t/a and combined capacity of 2.61 million t/a.
   Since 2003, the newly-built single-set capacity of ethylene production units has been growing larger and larger. The average capacity of ethylene production units has increased from 314 000 t/a in 2003 to 547 000 t/a in 2009. It is expected that after the ethylene unit of Sinopec Zhenhai Refining & Chemical Co., Ltd. is put into production in 2010, the average capacity of China's ethylene production units will reach 580 000 t/a.

China's Major Ethylene Producers (As of end-November 2009)     
Company                                             Capacity (000 t/a)
Shanghai Secco Petrochemical Co., Ltd.              1 090
BASF-YPC Co., Ltd.                                  600  
Sinopec Maoming Petrochemical Co., Ltd.             1 000
Sinopec Shanghai Petrochemical Co., Ltd.             850    
Sinopec Qilu Petrochemical Co., Ltd.                 720
Sinopec Yangzi Petrochemical Co., Ltd.              650
Sinopec Yanshan Petrochemical Co., Ltd.             710
Sinopec Tianjin Petrochemical Co., Ltd.              1 200    
Sinopec Zhongyuan Petrochemical Co., Ltd.           180
Sinopec Guangzhou Petrochemical Co., Ltd.            210
Sinopec Beijing Eastern Petrochemical Co., Ltd.       150
Fujian Refining & Petrochemical Co., Ltd.            800
PetroChina Liaoyang Petrochemical Co., Ltd.         200
PetroChina Daqing Petrochemical Co., Ltd.           700
PetroChina Dushanzi Petrochemical Co., Ltd.         1 220
PetroChina Jilin Petrochemical Co., Ttd.            850    
PetroChina Lanzhou Petrochemical Co., Ltd.           600
PetroChina Fushun Petrochemical Co., Ltd.            200
Shenyang Chemical Co., Ltd.                         500
Liaoning Huajin Chemical Industry Group              450
China National Offshore Oil Corporation             800
CNOOC and Shell Petrochemicals Co., Ltd.             800
Total                                               13 680
Source: CNCIC  


(2) New, proposed and expanded ethylene projects   

The Adjustment and Stimulus Program of the Petrochemical Industry, released in May 2009 puts forward the development goals of China's ethylene industry - By 2011, China's ethylene output will reach 15.5 million t/a, and China will establish 11 ethylene production bases with a capacity of over 1 million t/a each.  

China's Newly-built and Expanded Ethylene Projects    
Company     Location     Expected operation time     Capacity (000t/a)    Remarks
Sinopec Zhenhai Refining & Chemical Co., Ltd.
            Ningbo      2009                         1 000     under construction
China National Offshore Oil Corporation
            Huizhou     2011                        1 000     launched in Sep. 2008
China National Petroleum Corporation
            Pengzhou    2012                        800      launched in 2008
Sinopec Hubei Wuhan Petroleum Group Co., Ltd.
            Wuhan       2011                        800      Under construction
PetroChina Fushun Petrochemical Co., Ltd.  
              Fushun      2010