By Tan Jie, Sinopec Maoming Petrochemical Co., Ltd.

The capacity makes a stable growth

With constant improvements of MTO and MTP technologies in recent years, many enterprises have used coal as raw material to produce propylene through the MTO or MTP technology and in turn used propylene to produce PP in regions with rich coal resources such as Ningxia, Shaanxi, Xinjiang and Guizhou. Moreover, the development of the PDH technology has also accelerated the capacity expansion of downstream PP. The total capacity of PP in China reached 23 300 kt/a in 2017. The capacity of oil-based PP units (including propylene from ethylene projects and refineries) accounted for around 58.0% of the total. The capacity of MTO/MTP PP units accounted for around 32.0%. The capacity of PDH PP units accounted for around 10.0%. Oil-based PP units have an extensive distribution. Most of them have upstream/downstream integrated units. MTO/MTP PP units are mainly concentrated in Northwest China mainly because the region has rich reserves of coal resources. Most of them have matched upstream units. PDH PP units are mainly concentrated in coastal East China mainly because raw material propane has to be imported from abroad.
   PP production units in China are mainly concentrated in Northwest China, North China and South China. The capacity of PP in these regions accounted respectively for 32.91%, 19.52% and 18.60% of the national total in 2017. Sinopec, PetroChina and Shenhua Group are major PP producers and the capacity accounts respectively for 35.03%, 15.91% and 11.37% of the national total. Table 1 shows the major PP producers with a capacity of 300 kt/a and above in China in 2017.

Table 1   Major PP producers in China, 2017

High-quality products still fail to meet the needs

   The output of PP, the output of high-quality products in particular, in China today still fails to meet the needs in actual production. In view of this, large oil refining projects and ethylene projects to be constructed in next few years will mostly have matched downstream PP units. Large coal-to-olefin projects and olefin projects based on purchased methanol and propylene projects based on the dehydrogenation of purchased propane in private enterprises will also mostly select PP as the downstream use of propylene. The capacity of PP will therefore make a constant increase. It is expected that the total capacity of PP in China will reach over 30 000 kt/a in 2022. At that time the capacity proportion of PP units using propylene from steam cracking and refineries as raw material will make a gradual reduction whereas the capacity proportion of PP units using coal or propane as raw material will go up. Today, however, coal-based PP units are faced with a dual pressure from raw material availability and environmental protection. Some project construction plans will likely be pigeonholed or postponed. Table 2 shows the new PP projects planned to be constructed in China during 2018-2022.

Table 2   New PP projects planned to be constructed in China during 2018-2022

Great quantities of PP still need to be imported a year

   According to customs statistics, the import amount of PP in China was 3 177.6 kt in 2017, an increase of around 5.31% over the previous year. The export amount of PP was 295.9 kt in 2017, an increase of around 23.45%.
   The import of PP in China is mainly from Saudi Arabia and the United Arab Emirates of the Middle East, Korea of Northeast Asia, Taiwan and Singapore of Southeast Asia. The amount imported from these 5 sources in 2017 was 2 271.9 kt, accounting for around 71.50% of the total import amount, an increase of around 1.14% over the previous year. Korea was the biggest import source and the amount imported was 864.4 kt, accounting for around 27.20% of the total and an increase of around 3.42% over the previous year. The amount imported from Saudi Arabia was 529.3 kt, accounting for around 16.66% of the total and an increase of around 3.91% over the previous year. The amount imported from Singapore was 351.9 kt, accounting for around 11.07% of the total and a drop of around 5.40% from the previous year. The amount imported from Taiwan was 288.6 kt, accounting for around 9.08% of the total and an increase of around 16.23%. The amount imported from the United Arab Emirates was 237.7 kt, accounting for around 7.48% of the total and a drop of around 15.32% from the previous year.
   The import of PP in China is mainly concentrated in Guangdong, Zhejiang, Shanghai and Jiangsu. The amount of PP imported in these 4 regions in 2017 totaled 2 464.3 kt, accounting for around 77.55% of the total import amount and an increase of around 3.73% over the previous year.

The market demand will make a sustained increase

   The apparent consumption of PP in China was 21 956 kt in 2017, an increase of around 3.2% over the previous year. The self-sufficiency rate of corresponding products was 86.9%. In China PP is mainly used to produce woven products, film products, injection-molded products and textile products with extensive applications in packaging, electronic, household electric appliance, automobile, fiber and construction pipe sectors. The production of woven products such as woven bags, baling bags and wrapping ropes is the biggest consumption sector for PP. The consumption of PP in this sector accounted for 29.6% of the total in 2017. Conventional PP varieties are mainly used. The production of injection-molded products is the second major consumption sector. Special varieties mostly imported from abroad are mainly used. Most of high-grade special varieties used in washing machines and automobile components, in particular, are imported from abroad in the form of processing by supplied materials. Both product quality requirements and product added value are high. The consumption of PP in this sector accounted for around 26.9% of the total in 2017. Another major consumption sector for PP is the production of films and sheets. The consumption of PP in this sector accounted for around 24.3% of the total in 2017. Major products are BOPP films. The consumption of PP in the production of fibers accounted for around 13.7% of the total and the consumption of PP in the production of pipes accounted for 4.1% of the total.
   The PP sector in China will have huge development spaces and opportunities in next few years. Automobile lightweight, energy conservation, environmental protection and track transport development will push the demand of transport plastics to make a further increase. With extensive applications of greenhouse films in agriculture and plastic products in the packaging sector and the medical apparatus market, the demand of PP will continue to have a stable increase. It is expected that the total consumption of PP in China will reach around 24 000 kt in 2022.

Future development

   The capacity growth of PP in China is much higher than the consumption growth in recent years. The self-sufficiency rate has made a constant increase from 66.7% in 2006 to 86.9% in 2017. It is expected that by 2022 there will be a status of capacity surplus in the PP market and market competition will be extremely fierce.
   As existing units and new units to be constructed in future will mainly produce homogeneous and low-end conventional varieties, the development of high-end products will be inadequate. The domestic demand of high-end products can in no way be satisfied and considerable amounts will still need to be imported from abroad. PP producers in China should readjust the product structure, make the well-targeted development of products, increase the output of special varieties and varieties with high added value, promote the serialization of high-performance products such as products with high crystallization and high rigidity, products with high melt strength, high fluidity, BOPP films with high-speed stretching, heat-sealing films, packaging films with great transparency, blow-molded products, high-impact products and thin-wall injection-molded special varieties so as to gradually change the total monopoly of high-end PP products by imported products.