2022 Annual Capacity Warning Report for Key Petrochemical Products Released

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Report on Capacity Alerts for Key Petrochemical Products in 2022 Released – Author/Source: Coal Chemicals Journal, Date: 2022-07-03, Clicks: 12. A few days ago, the China Petroleum and Chemical Industry Federation released the “Report on Capacity Alerts for Key Petrochemical Products in 2022”. The Report indicates that in 2021, the economic performance of China’s petrochemical industry exceeded expectations, with major economic indicators showing significant growth. Among the 28 key petrochemical products under close monitoring by the Petrochemical Federation, the capacity utilization rates for 21 products such as ethylene glycol and caustic soda increased, while those for 7 products including ethylene and p-xylene showed a downward trend. The main reason for this decline was that most of the newly built facilities began operations in the second half of the year. The Report predicts that by 2022, China’s refining capacity will reach 910 million tons per year, making it the world’s largest refining country. However, with the promotion and adoption of new energy vehicles in the country, the refined oil market will face an even greater surplus of supply over demand. Basic petrochemical raw materials such as ethylene, propylene, ethylene glycol, and p-xylene are still in a period of high production, and the supply gap for some products has narrowed. The capacity utilization rates of some basic chemical raw materials for which production growth is strictly controlled, such as caustic soda, soda ash, methanol, calcium carbide, 1,4-butanediol, and titanium dioxide, have increased. In addition, the fertilizer industry is seeing a recovery; the supply and demand in the nitrogen fertilizer market are in balance, and the overcapacity in phosphate fertilizers has improved. Synthetic resins such as polyolefins and polycarbonates are in a period of capacity expansion, while PVC still suffers from overcapacity. There is severe structural overcapacity in synthetic rubber production. The international competitiveness of polyurethanes has improved, and increased exports have kept plant utilization rates high. Sun Weishan emphasized that products such as propylene, p-xylene, ethylene glycol, polycarbonate, titanium dioxide, BDO, biodegradable materials, and lithium iron phosphate may lead to overcapacity issues as new projects come online and begin operations. Under the pressure of an economic downturn, there is a trend toward accelerating the launch of petrochemical construction projects across various regions, leading to excessive investment; caution is needed to avoid a new wave of overcapacity. At the same time, the industry must also attach great importance to safety and environmental protection in its operations, foster a \"red line awareness,\" and resolutely prevent the occurrence of severe accidents again. We must also adhere to green sustainability and high-quality development, promote technological innovation and the upgrading of the industrial structure, and advance the construction of a carbon circular economy system.