Sinopec Shanghai plans to invest around 3.196 billion yuan to build a large-tow carbon fiber project in another location
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Sinopec Shanghai Petrochemical Co., Ltd. announced on January 26 that it plans to invest around 3.196 billion yuan in building a large-tow carbon fiber production facility in another location. To date, Sinopec Shanghai has completed the first phase of its projects for producing 24,000 tons per year of precursor fibers and 12,000 tons per year of 48K large-tow carbon fiber; as a result, it now has a production capacity of 24,000 tons per year of 48K precursor fibers and 6,000 tons per year of 48K large-tow carbon fiber, with all performance specifications met. The construction period for the new project is 3 years. For the carbon fiber component, a production facility capable of producing 30,000 tons per year of large-tow carbon fiber will be built in the Sulihe Economic Development Zone in Ordos City, Inner Mongolia Autonomous Region; this will be carried out through the establishment of a new wholly-owned subsidiary ； For the precursor fiber section, a 60,000-ton/year large-bundle precursor fiber production facility will be built within the existing plant site in Jinshan District, Shanghai. Shanghai Petrochemical stated that the project is an integrated upstream and downstream industrial facility, with controllable raw material supply. The newly built filament production facility upstream is located at Shanghai Petrochemical. Leveraging Shanghai Petrochemical’s technical expertise and human resource advantages, as well as its existing utility facilities and unused land, the facility can rely on the stable acrylonitrile production capacity in the East China region to ensure a secure supply of key raw materials. The main raw material for the new carbon fiber production facility to be established downstream is provided by the filament production unit. The facility is located in the Sulihe Economic Development Zone in Ordos, an area with abundant energy resources, strong policy support, and a complete industrial infrastructure, offering significant advantages in terms of energy and labor costs.
(1) For the carbon fiber segment, with an investment amount of 2.243 billion yuan, it is planned to build a 30,000-ton/year large-tow carbon fiber production facility through the establishment of a new wholly-owned subsidiary. The location for this facility will be the Sulihe Economic Development Zone in Ordos City, Inner Mongolia Autonomous Region, where there are advantages in terms of energy costs and labor costs. The new subsidiary, Inner Mongolia Xinjinshan Carbon Fiber Co., Ltd., has a registered capital of 20 million yuan, and its business scope includes the manufacturing of high-performance fibers and composite materials ； Sales of high-performance fibers and composite materials ； Sales of graphite and carbon products ； Manufacture of graphite and carbon products ； Synthetic fiber manufacturing ； Synthetic fiber sales ； Synthetic Materials Sales ； Research and development of carbon fiber recycling technologies, etc. (tentative).
(2) For the precursor fiber section, an investment of 953 million yuan is allocated to build a large-bundle precursor fiber production facility with an annual capacity of 60,000 tons. The site is located within the company’s existing factory complex in Jinshan District, Shanghai, making full use of the existing utility facilities and unused land. The main raw materials can be supplied locally thanks to the stable acrylonitrile production capacity in the East China region. The announcement states that this project is in line with Shanghai Petrochemical’s development strategy of shifting from oil refining to chemical manufacturing, from chemical manufacturing to materials production, from materials production to high-end products, and from industrial parks to ecological systems. The product targets pultruded sheets for wind turbine blades as its main market, and can also be applied in the fields of rail transit and civil engineering reinforcement, while actively expanding into the low-altitude industry. However, the market data for carbon fiber is not optimistic at present. According to statistics, by the end of 2024, China’s annual carbon fiber production capacity reached 135,500 tons, with an additional 15,300 tons of capacity added; the growth rate was 12.73%, a slowdown compared to 2023. On the other hand, the apparent consumption of carbon fiber in China in 2024 was 60,300 tons, a 5.41% decrease compared to 2023; this decline has persisted for two consecutive years. Prices also dropped significantly, from nearly 186 yuan per kilogram in May 2022 to 85 yuan per kilogram in the fourth quarter of 2024, representing a reduction of 54%. Currently, the domestic market has an ample supply, and the progress of new projects across various companies has slowed down, with many production start dates being delayed ； Most companies maintain stable production at low capacity levels while actively working to reduce inventory.
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