Development of China’s Petrochemical Industry

By Li Bingmei, CNCIC

In the last decade, the development of the global chemical industry was volatile. In specific, from 2004 to 2008, the gross industrial output grew fast, averaging 10% a year. After that, impacted by global economic crisis, the gross industrial output went up and down. From 2009 to 2011, output dropped steadily, while in 2012, it showed a rapid recovery growth, increasing over 20% in a year. However, since 2013, the development of the global chemical industry went into a smooth period, maintaining slow growth each year.
In the last decade, China’s chemical industry kept pace with the national economy. Its overall scale and economic benefit both grew significantly. From 2004 to 2014, the output value of China’s petrochemical industry increased from RMB2 466.6 billion to RMB16 000 billion; growth has averaged 20.56% a year. In 2009, impacted by the global economic crisis, the growth rate of GDP, industrial production and petrochemical industrial production all decreased sharply. After that, as the economy recovered, petrochemical industrial production rebounded quickly, increasing 33.9% in 2010. From 2011 to 2015, China slowed down the economy and deepened industrial structure adjustment, and the growth of industrial and petrochemical industrial production also slowed. The proportion of industrial production gradually declined in the national economy, while the percentage of petrochemical industry gradually increased in the whole industry. Figure 1 shows the development of Chinese economy, industry and petrochemical industry.
In recent years, based on China’s urbanization, petrochemical products are in great demand. Over the period 2001 to 2010, the growth rate of petrochemical output averaged 12.5%/year, including fertilizer growth of 7.6%/year, basic inorganic chemicals (three acid, two alkali and calcium carbide) growth of 11.2%/year, basic organic chemicals (three benzene and three olefins) growth of 14.6%/year and synthetic material (resin, rubber and fiber) growth of 15.4% /year.
Over the period 2011 to 2015, China’s petroleum and chemical industries maintained stable development, all kinds of chemical products output increased steadily. Output of significant commodities such as refined oil, ethylene, synthetic resin, inorganic raw material, fertilizers and pesticides were among the highest in the world, basically meeting the national needs.
In the period 2011 to 2015, the intensification of China’s petroleum and chemical industry developed obviously. By 2014, China has built four 20-million-ton oil refining bases (including Sinopec Zhenhai Refining & Chemical Company with 23.8 million t/a, Sinopec Maoming Company with 23.5 million t/a, Sinopec Jinling Company with 21 million t/a and Sinopec Dalian Company with 20.5 million t/a) and twenty-six 10-million-ton oil refining bases. Three oil refining bases including around Bohai Bay base, Yangtze River Delta base and Pearl River Delta base gradually formed an industrial cluster. Meanwhile, a 2-million-ton ethylene base has been built in Shanghai, seven 1-million-ton ethylene bases have been built in Tianjin, Nanjing, Ningbo, Maoming, Daqing, Dushanzi and Fushun. In the period 2000 to 2014, the scale of steam cracking devices for ethylene increased from 247 kt/a to 585 kt/a. The average size of enterprises increased from 279 kt/a to 755 kt/a.
Moreover, large modern energy chemical bases have been built, including Inner Mongolia Dalu Industrial Park, Ningdong Energy & Chemical Industry Base, Yulin Energy & Chemical Industry Base and Xinjiang Zhundong Energy Base. According to preliminary statistics, 850 domestic cheical parks have been built.

Table 1    Output of major petrochemical products in China

Product    2010    2013    2014
Crude oil (million tons)    203.01    208.20    210.10
Natural gas (including unconventional natural gas) (billion m3)    94.2    122.5    132.9
Raw coal (million tons)    3 240    3 680    3 870
Petrol (million tons)    76.75    98.33    110.30
Diesel oil (million tons)    158.88    172.73    176.54
Ethylene (million tons)    14.27    16.29    17.04
Propylene (million tons)    13.50    16.60    18.20
Methanol (million tons)    17.52    32.80    42.50
Nitrogen fertilizer (convert into purification) (million tons)    38.50    49.27    46.52
Synthetic ammonia (million tons)    49.63    57.45    56.99
Urea (million tons)    25.13    33.33    32.18
Phosphate fertilizer (convert into purification) (million tons)    15.82    16.33    16.85
Potash fertilizer (convert into purification) (million tons)    2.82    4.40    5.57
Soda ash (million tons)    20.29    24.29    25.95


Meanwhile, the scale of petrochemical enterprises grew obviously. From 2010 to 2014, the number of large-scale petrochemical enterprise increased obviously. 10-million-ton oil refining firms increased from 21 to 26, 700-thousand-ton ethylene firms increased from 9 to 17. Large petrochemical enterprises including Sinopec, CNPC, CNOOC, China National Chemical Corporation and Sinochem have entered the world’s top 500 enterprises.
Moreover, as the development of new technology of coal chemical engineering, the demonstration projects including CTL, coal to olefin, synthetic natural gas and CTEG were built, exploring a feasible way of oil substitution, enhancing the diversification of chemical material supplement.
In the future, China’s petrochemical industry will face multiple challenges such as the unstable pattern of the world energy, the increased competition of foreign productions, the downward pressure of the domestic economy and the increased requirements of environmental protection. The petrochemical industry will improve quality other than expanding scale by technical innovation. By following the principle of diversifying raw material sources, advancing product structure, making intensive industrial layout and protecting the environment, domestic players try to optimize petrochemical industrial structure, develop new chemical energy and chemical materials, enhance international competitiveness and sustainable development capabilities of petrochemical industry.