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1.56 million tons! Wanhua Chemical Adds Two More Projects 2025-04-30 13:32:35 After receiving an investment of $638 million from a Middle Eastern oil giant, on April 28th, Wanhua Chemical announced two new projects in the field of chemical materials, with a combined production capacity of 1.56 million tons! The first project is the 600,000-ton per year PC production project of Wanhua Chemical (Fujian) Co., Ltd. This is a new construction project located in the western industrial zone of Jiangyin Port City Economic Zone, Jiangyin Town, Fuqing City, Fujian Province. It involves the construction of 3 units, each with a capacity of 200,000 tons per year, along with supporting facilities. The project will enable an annual production of 600,000 tons of PC and 108,000 tons of BPA, with the overall technology reaching international advanced levels. By the end of 2024, Wanhua Chemical’s PC production capacity was 480,000 tons per year. In June 2024, the company announced plans to increase the production capacity of its existing PC plants from 480,000 tons per year to 600,000 tons per year, but this increase has not yet been fully implemented. With this project, in the future, Wanhua Chemical’s total polycarbonate production capacity will exceed 1.2 million tons, giving it a significant lead in China. It is reported that in 2024, China’s production capacity for polycarbonate exceeded 3.8 million tons, while the output reached over 3 million tons; the capacity utilization rate was 84%, setting a new record for the industry. It is expected to rise to 4.5 million tons per year by 2025, accounting for over 40% of global capacity. The key companies include Wanhua Chemical, Luxi Chemical, Lihua Yiweiyuan, Zhejiang Petrochemical, Zhejiang Railway Dafeng, Hengli Petrochemical, Hainan Huasheng, Hubei Ganning, Shengtong Juyuan, Cangzhou Dahuahua, and Shenma, among others. In addition, companies such as Covestro, Teijin, Zhongsha, and Mitsubishi Gas also have production facilities in China. With gradually increasing production capacity, the proportion of low-end generic materials exceeds 60%, and the utilization rate of low-end production capacity remains below 55% for long periods of time; this is driving the industry’s gross margin down to near zero. It is reported that as of the end of March 2025, the dynamic gross margin in China’s PC industry was -275 yuan per ton; the average gross margin for the first quarter was -561 yuan per ton, representing a year-on-year decline of 182.26% and a month-on-month decline of 484.38%, reaching the lowest level in three years. On the other hand, high-end PC varieties such as those with flame-retardant electronic and electrical properties, automotive-grade PC, optical-grade PC, and medical-grade copolymer PC enjoy decent gross profit margins; moreover, domestic supply for these products accounts for less than 30%, so there is an urgent need to make progress in this area, which represents a final opportunity. In March this year, Wanhua Chemical’s Clarnate® HL6157 optical-grade polycarbonate material passed the certification for use as lamp cover materials by Hyundai-Kia Group, the world’s third-largest automobile manufacturer, thereby becoming the first Chinese company to enter this group’s automotive materials supply chain. Furthermore, recycled polycarbonate is gaining momentum. In this area, Covestro is at the forefront of the industry. In 2023, the company put into operation the world’s first production line dedicated to the physical recycling of polycarbonate, with an annual output of over 25,000 tons. In April 2025, it announced the introduction of polycarbonate containing 50% post-consumer physically recycled materials, thereby achieving a closed-loop use of plastics in the automotive industry. It also developed a range of circular economy products under the R, RE, and RP series, and plans to supply over 60,000 tons of recycled polycarbonate in the Asia-Pacific region by 2026. In addition, companies such as Shengxi Ao, SABIC, INEOS, LG Chem, and Toray have already made strategic investments in this area. Additionally, bio-based polycarbonates represent a new trend. Covestro, SABIC, LG Chem, Teijin, and Mitsubishi have all been involved in this area for a long time; in particular, Mitsubishi Chemical has advanced rapidly in terms of industrialization in this field. It displayed several related products at this year’s plastics exhibition, with those products being geared towards high-end applications in the electronics and electrical industry. It is reported that Shengtong Juyuan in China is about to start producing isosorbitol-based bio-polycarbonates. The second project is the 960,000-ton per year PVC production project of Wanrong New Materials (Fujian) Co., Ltd. This project is located in the same area as the previous one and is also a new construction initiative; it aims to produce 960,000 tons per year of vinyl chloride and 960,000 tons per year of polyvinyl chloride, along with the necessary utility and auxiliary facilities. As a by-product, 86,000 tons of 25% hydrochloric acid will be generated. Currently, Wanhua Chemical’s PVC production capacity is 800,000 tons per year; with this new project, the capacity will rise to 1.76 million tons in the future! According to data from Longzhong Information, as of the end of 2024, China’s effective PVC production capacity was 27.54 million tons, with an annual production volume of 23.44 million tons – a 2.7% increase compared to the previous year – and a capacity utilization rate of around 78%. Meanwhile, in 2024, the domestic polyvinyl chloride (PVC) market saw its prices drop to their lowest level in 6 years due to the combined pressure of weak demand from the real estate sector and increasing production volumes; the average transaction price was around 4,900 yuan per ton, and most domestic companies ended up operating at a loss. The expected PVC production capacity for 2025 is 34.6 million tons, of which 3.7 million tons represent new capacity additions; the growth rate in production capacity is 11.97%, the highest level in many years. In April of this year, PVC profits declined, falling slightly below the levels seen in the same period last year and reaching the lowest level for that time of year. Similar to PCs, the future prospects for PVC lie in high-end industries where there is rapid upgrading, such as healthcare, consumer electronics, automotive, and wires and cables. Additionally, high-end film segments such as packaging materials, medical applications, building materials, and industrial specialty films offer decent gross profits and come with significant technical barriers.