The first of the five general-purpose synthetic resins - polyethylene
Polyethylene (pe) is a polymer made of polymerization of ethylene monomers. Due to its easy processing, odorless and non-toxic, and good comprehensive properties, polyethylene is widely used and its production capacity is growing rapidly. As one of the five general-purpose synthetic resins, the current global production capacity and consumption of polyethylene rank first among the top five synthetic resins.
China started late, and the speed of development in the 21st century has accelerated
Polyethylene was synthesized in 1933 by the British ici and began industrial production in the United States in 1939. China did not start to put into operation pe devices until 1976, of which Shanghai Petrochemical and Yanshan Petrochemical put 100,000 tons and 180,000 tons each, and the annual production capacity of a single line was only 50,000 tons and 60,000 tons, and the scale of the device was small. Eleven years later, in 1987, the first plant with a production capacity of more than 100,000 tons appeared in China - Yangzi Petrochemical has an annual production capacity of 120,000 tons. In 1996, Maoming Petrochemical put into operation a full-density device with an annual production capacity of 220,000 tons, and the production capacity of a single set of domestic units was raised to a higher level. In 2005, Shanghai SECCO put into operation the first set of PE plants with an annual production capacity of 300,000 tons in China. After four years, the production capacity of Fujian joint single-unit unit exceeded 400,000 tons to 450,000 tons per year.
Before 1990, the progress of domestic PE device launch was very slow, and in the 14 years from 1976 to 1990, only 5 years of new devices were started. Before 2005, the total production capacity of domestic PE was small, and even if the annual new equipment did not exceed 200,000 tons, the production capacity growth rate in that year was also very high. In 2004, the annual production capacity of pe in China was 3.718 million tons, 13.3 times that of 1976. In 2005, due to the centralized release of PE devices such as Shanghai SECCO, China Overseas Shell, Guangzhou Petrochemical, BASF Yangtze, Shanghai Jinfei, Daqing Petrochemical and Dushanzi Petrochemical, the annual production capacity totaled 1.96 million tons, making the pe production capacity growth rate of 52.7% in that year. With the continuous expansion of the production capacity base, after 2005, even if the new production capacity in some years exceeds 3 million tons, the annual production capacity growth rate is significantly lower.
From 1976 to November 2021, new devices and production capacity were added in the domestic PE calendar year
Source: Zhuo Chuang Information, CITIC Construction Investment Futures
Diversification of raw materials
After 2005, china has a new PE device every year, and in the past 16 years, PE has experienced three rapid expansion cycles, and these three capacity expansions are also the embodiment of the diversification process of domestic PE production processes.
The first time was in 2009, Fujian United, Dushanzi Petrochemical and Zhongsha Tianjin and other oil-making PE plants were put into production, and the scale of the device was large, making the annual production capacity growth rate of domestic PE as high as 29.8%.
The second time is 2014, since Shenhua opened the first set of coal-to-polyolefin devices in 2010, the rapid development of domestic coal chemical industry, and in 2014 ushered in the peak of coal chemical concentrated production, including Yanchang Coal Yunenghua, Ningxia Baofeng, China Coal Shaanxi Yulin and Pucheng Clean Energy and other enterprises, as of 2019, the proportion of coal (methanol) pee process capacity increased to 27%, in 2020 due to the increase of other process devices, the proportion of coal (methanol) pee process capacity decreased to 23.9% month-on-month.
The third time is 2020-2021, with the advent of the era of large-scale refining and light hydrocarbon processes, Zhejiang Petrochemical, Hengli Petrochemical, Zhongke Refining, Sinochem Quanzhou, Liaoning Baolai and other enterprises have been put into operation, with an annual new production capacity of up to 3.5 million tons, and the growth rate of PE production capacity in 2020 is 18.36%. At the same time, the start-up of Baolai Petrochemical and Yantai Wanhua PE device has opened the curtain of domestic light hydrocarbon process PE, marking the formation of domestic polyethylene from the oil process to the "hegemony" of the kerosene process, and then to the formation of the "three worlds" of coal, oil and light hydrocarbons. In 2021, the new production capacity of the domestic PE plan is still more, the total production capacity of the planned production device is more than 5 million tons, as of the beginning of November 2021, the plant that has been put into production plus the device that is planned to be put into operation in November, the total annual production capacity has reached 4 million tons, that is, the absolute amount of new domestic PE production capacity this year will reach a new high. From the perspective of the proportion of annual production capacity of different processes, as of October 2021, the proportion of pe production capacity of coal (including external methanol) continues to drop to about 21%, while the proportion of light hydrocarbon process capacity has increased rapidly from 7% in 2020 to 14%.
Background and current situation of coal-to-polyethylene development
China has the resource characteristics of "rich coal, poor oil and less gas", and the production of olefins by "coal" instead of "oil" was once one of the important ways to realize China's energy strategy of "coal instead of oil" and ensure national energy security. In addition, after 2004, the international oil price soared and plummeted, the impact on the production costs of enterprises is greater, in 2010, when the first set of domestic coal-to-polyethylene devices were put into operation, Brent oil prices were near $60 / barrel, U.S. crude oil was about 75 US dollars / barrel, from 2011 to 2014, Brent oil prices were more than 100 US dollars / barrel. From 2010 to 2014, the price of the main coal-producing areas was mostly below 500 yuan / ton, and coal-to-polyethylene had a very obvious cost advantage. Therefore, after the centralized release of coal chemical industry in 2014, some coal chemical enterprises put into operation every year. The proportion of coal-based (including external methanol-based) polyethylene production capacity reached a maximum of 27% in 2019, and in 2020, due to the large number of large-scale refining and light hydrocarbon process units, the proportion of coal-based (including externally mined methanol) process capacity fell to 23%. From 2020 to November 2021, only Shaanxi Yanchang China Coal Yulin annual production capacity of 300,000 tons of ldpe coal chemical plant put into operation, the rest are all oil and light hydrocarbon process production equipment, it is expected that in 2021, the proportion of domestic coal (including externally mined methanol) PE production capacity will drop to about 21%.
Prospects for the development of ethylene production processes
Although the domestic polyethylene production capacity continues to expand, but China's polyethylene demand is also growing rapidly, domestic production capacity continues to exist a large gap, making the domestic need to continue to import a large number of polyethylene. As of September 2021, China's pe dependence on foreign countries is still as high as 40%. It is expected that in the future, there will still be a large number of polyethylene plants in China, including the coal-to-polyethylene plants that have been planned, such as Qinghai Damei, Shanxi Lubao, China Coal Yulin Phase II, Feihong Chemical, SDIC Xinjiang Yili Coal Chemical and so on.
In the context of national carbon peaking and carbon neutrality, coal-to-olefin projects will gradually be more restricted, and the cost advantages of superimposed coal-to-olefins are no longer obvious, and it is expected that coal-to-olefin projects will gradually decrease in the future. The light hydrocarbon to olefin has the advantages of short route, high yield, low cost and green environmental protection, and may be sought after by the market in the future, and the proportion of light hydrocarbon polyethylene production capacity is expected to be further increased.
Overall, although China's polyethylene started relatively late, but both the scale of the device and the type of process are developing very rapidly, and China has become a global PE production country. After 2005, there are new devices in China every year, the average annual growth rate of PE production capacity is more than 12%, and the production of raw materials is diversified. Since 2010, China has successively appeared coal-to-coal process and light hydrocarbon process, the production process is more abundant, the number of new enterprises is increasing, and the competition between production enterprises is also more intense. In the future, in the context of national carbon peaking and carbon neutrality, coal-to-olefin projects are expected to gradually decrease. The light hydrocarbon to olefin has the advantages of short route, high yield, low cost and green environmental protection, and its production capacity proportion is expected to have room for improvement.
The above content comes from CITIC Construction Investment Futures Micro Information, the original author Zhang Yuanliang (Futures Investment Consulting Certificate Number: z0014040) the information in the notice is derived from publicly available information, CITIC Construction Investment Futures strives to be accurate and reliable, but does not make any guarantee for the accuracy and completeness of these information, according to this investment, the responsibility is borne by yourself. This report does not constitute personal investment advice and does not take into account the specific investment objectives, financial situation or needs of individual clients. Clients should consider whether any comments or recommendations in this report are consistent with their particular situation.
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