Yu Chen, Xiao Jiahong, CNCIC

Wu Ming, National Science Library, Chinese Academy of Sciences

China's polyolefin industry has been developing rapidly in recent years. Thus, with significant growth in both capacity and consumption, China has become a major polyolefin producer and consumer in the world. However, the industry has structural problems such as high dependence on imports and meager profits. Some high-end polyolefin products are still highly covered by imports and more efforts are yet to be made for breakthroughs in the R&D and production of high-end polyolefin products.

Development of Chinese polyolefin industry

China's polyolefin capacity is expanding these years and new polyolefin units have been put into operation. In 2020, the total domestic capacity of polyethylene hit 23.26 million t/a, up by 22% year on year, and the output of polyethylene totaled about 19.7 million tons, marking a year-on-year increase of 17%; the total domestic capacity of polypropylene reached 30.84 million t/a, up by 11% year on year, and the output of polypropylene totaled about 26.56 million tons, recording a year-on-year increase of 6.5%.

China's demand for polyolefins is increasing as a result of a fast-growing needs for anti-epidemic materials and packaging film materials. In 2020, the apparent consumption of polyethylene was around 37.62 million tons, up by 13% year on year, with a self-supply rate of 52%; the apparent consumption of polypropylene was about 30.57 million tons, increasing by 3.7% year on year, with a self-supply rate of 86%. 

At the same time, China is also a major importer of polyolefins in line with the continuously stronger domestic demand. In 2020, the imported volume of polyethylene totaled 18.53 million tons, up by 11%year on year, which was mainly from Saudi Arabia, Iran, UAE, South Korea, Singapore, and Thailand; the import volume of polypropylene reached 4.89 million tons, down by 0.9% year on year, which was mainly from South Korea, Saudi Arabia, India, UAE, Singapore, Japan, and the US. However, the export volume of polyethylene was about 250 000 tons and that of polypropylene was about 440 000 tons, reflecting a huge trade deficit.

Figure 1 and Figure 2 show the capacity, production and consumption of polyethylene and polypropylene in China in recent years.

Figure 1: Capacity, production and consumption of HDPE + LDPE in China

Figure 2: Capacity, production and consumption of polypropylene in China

Development trend of high-end polyolefins

China's polyolefin industry has been growing in recent years. With a big number of polyolefin units put into production, the capacity and output of both polyethylene and polypropylene have increased significantly, making China a major polyolefin production country. However, the industry is facing structural issues such as high dependence on importing and meager profits. On one hand, the capacity of mid and low-end products is becoming surplus. On the other hand, the self-supply rate of high-end polyolefins is only 41%, although the market value has exceeded RMB100 billion and the apparent consumption has reached 12 million tons.

China Petroleum and Chemical Industry Federation issued Development Guide for New Chemical Materials Industry during the 14th Five-year Plan Period to attach importance to the development and improvement of high-end polyolefins, with an aim of increasing the self-supply rate to nearly 70% by 2025. Some domestic petrochemical enterprises, research institutes and universities, such as Wanhua Chemical, Daqing Petrochemical, Dushanzi Petrochemical, Qilu Petrochemical, Shenyang Petrochemical, Yangtze Petrochemical, Yanshan Petrochemical, PetroChina Petrochemical and Chemical Research Institute, Zhejiang University, Institute of Chemistry in Chinese Academy of Sciences, are being committed to the R&D and production of high-end polyolefins, such as metallocene products and polyolefin elastomers, and they have made breakthroughs.

R&Q trend of high-end polyolefin technology in China

More than 6 000 patents related to high-end polyolefinswere applied in China from 1981 to 2020. The application number in this field increased rapidly after 2013 and the uptrend continued. The trend of patent applications in the last decade was largely consistent with that during the period of global expansion, but the number grew faster, accounting for 83% of the total number of patent applications. In general, China is in the booming phase of the R&D of high-end polyolefin technologies.

In terms of the number of patent applications, 3 309 were from domestic applicants, accounting for 53.5% of the total, as they were slightly advantageous in the application. However, since 2014, the number of foreign patent applicants in China has increased significantly, far exceeding that of domestic patent applicators. The foreign applicants are mainly from Europe, South Korea and the US, accounting for 21%, 19% and 18% of the total, respectively. The top 10 patent applicants for high-end polyolefins in China are Sinopec Group, Borealis Group, Dow Chemical Group, LyondellBasell Group, PetroChina, LG Chemical Group, ExxonMobil Group, SABIC, Institute of Chemistry of Chinese Academy of Sciences, and Mitsui Chemical.

    The development of high-end products in downstream industries such as automobiles and medical devices gives rise to increasing demand for high-end polyolefins, so the high-end polyolefin market outlook is bright. China’s polyolefin industry is growing year by year, and accordingly, the capacity of mi and low-end general products is more and more surplus, leading to furious market competition. However, many high-end polyolefin products have to be imported due to low self-supply rate, so there will be a long way to go before the commercialization of local products. In the future, Chinese producers will be focused on developing higher-end, differentiated and functional products in an effort to cover domestic demand instead of importing such products. As for technology, they will shore up R&D of diversified raw materials, catalyst technology, polymerization process and large-scale equipment, so as to break through the production technology of high-end polyolefins.