Accelerated strategic transformation in the petrochemical industry: Domestic ethylene production capacity to exceed 62 million tons!

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On October 26, when CNPC Guangxi Petrochemical’s 1.2 million tons per year ethylene plant began operations, marking a point at which China’s annual ethylene production capacity was on the verge of exceeding 62 million tons, this was not merely the commissioning of a single facility; it was rather a reflection of the broader transformation taking place in the entire petrochemical industry. From the shores of the Beibu Gulf to the southeastern coast, a profound transformation of the industrial structure is taking place across China’s petrochemical sector. The significance of the ethylene plant put into operation by Xishihua Petrochemical goes far beyond the mere capacity figure. This set of equipment, which utilizes proprietary technology developed by China National Petroleum Corporation, marks the transformation of this traditional refinery into an integrated petrochemical enterprise focused on chemical products and organic materials, moving away from a focus on fuel production. More importantly, as a key project in the development of the Western Land-Sea New Corridor, its products will reach markets in the southwest, south China, and ASEAN, thereby promoting the coordinated development of related downstream industries such as packaging, building materials, and automobiles. Currently, China’s ethylene industry is on a dual track of rapid capacity expansion and deep structural adjustment. Data shows that by 2025, China’s new ethylene production capacity will be nearly 10 million tons per year, bringing the total production capacity to around 62 million tons per year. This growth trend is expected to continue until 2026, after which the growth rate is likely to slow down in 2027. By 2028, China’s deficit in ethylene equivalent is expected to be largely covered, which means that ethylene and its major downstream products will achieve self-sufficiency. Behind this capacity expansion lies the strategic transformation of petrochemical companies as they move up the value chain and toward its higher-end segments. The three strategic directions proposed by CNPC – \"reducing oil use and increasing chemical products,\" \"reducing oil use and enhancing specialty products,\" and \"reducing oil use and promoting green initiatives\" – are a clear reflection of this transformation. Companies are no longer satisfied with the production of basic chemicals; instead, they are turning their attention to areas such as specialty polymers and high-performance membrane materials that offer higher added value. With the rapid growth of new energy industries such as new energy vehicles, photovoltaics, and wind power generation, new materials such as photovoltaic-grade EVA, POE, and specialty materials for lithium-ion battery separators made from ultra-high molecular weight polyethylene have seen explosive growth. The profit margins of these materials far exceed those of traditional polyethylene products, making them a new focus of competition among enterprises. Meanwhile, the transformation and upgrading of China’s manufacturing sector, along with the increasing demands for material properties in high-end manufacturing fields such as rail transit and medical devices, have created new opportunities for the development of advanced new materials derived from ethylene. However, capacity expansion also comes with challenges. When the ethylene equivalent gap is largely closed by 2028, competition in the industry will become even fiercer. To gain a competitive edge in future market competition, enterprises need to accelerate technological innovation and product upgrading, building on their scale advantages. Especially in the context of carbon neutrality, how to achieve green and low-carbon development will be an important challenge for the entire industry. From the transformation of Guangxi Petrochemical to the rapid expansion of ethylene production capacity across the country, China’s petrochemical industry is writing a new chapter in its development. This is not just an increase in quantity, but also a qualitative leap. As more and more enterprises shift from fuel production to the development of new chemical materials, China’s manufacturing sector will become more solid, and its position within the global supply chain will further improve.