With the massive construction of refining projects in recent years, will 900 million tons of refining capacity represent the last wave of frenzy in the petrochemical industry? (Recent 30 years)
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The last edit to this post was made by 328104062 on 2017-12-20 at 22:17. As the title suggests, the United States has a refining capacity of around 800 million tons, and this figure has not increased in many years. In China, the current refining capacity is about 700 million tons – already sufficient – and with new projects under construction or planned, such as those in Zhoushan (4000 tons), Hengli (2000 tons), Lianyungang (1600 tons), Caofeidian (5000 tons), Guangdong (2000 tons), and Fujian, the capacity will be even greater than sufficient. As for basic organic raw materials like PX, based on China’s population of 1.3 billion (which is still declining due to an aging population), each person would need 20 kilograms of cotton per year; this amounts to around 26 million tons of cotton in total. Of this amount, 4 million tons come from Xinjiang, and another 2 million tons from provinces such as Henan. There is therefore a shortage of 20 million tons. Taking into account processing losses, this translates to a need for 20 million tons of PX
It’s likely that in the end, large companies will have an advantage due to their lower costs, while smaller companies will have to close down. How many small refineries can 40 million cover? ?
Regarding PX production: 1 million in Xinjiang, 2 million in Ningbo, 1 million in Dalian; the total from Guangdong and other regions is about 10 million. There is a shortfall of 10 million, of which 4 million comes from South Korea, 1 million from Japan, 100,000–200,000 from Singapore, and 3 million from other sources. If the figures are incorrect, please provide corrections
Regarding the new PX production capacity added in recent years, calculated at an increase of 2 million tons of PX per 10 million tons of refining capacity: Zhoushan has 4 million tons (with another 4 million tons added in phase two), Lianyungang has 3 million tons, Hengli has 4 million tons; while regions such as Guangdong and Hainan are already saturated
With overcapacity, competition should be fiercer; therefore, prices should drop. Why aren’t they falling but instead rising?
This is economies of scale; at that point, small refineries abroad will go bankrupt
It feels like everyone is competing with one another
I wonder if it will have an impact on local refineries in Shandong?
In both domestic and international markets, once the domestic market becomes saturated, competition for market share in other countries arises, and at that point logistics costs become significant
Sure, big fish eat small fish, and the small ones get acquired