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    Home > Chemicals Industry > China Chemical > With an annual production capacity of 2.2 million tons, the competition in the polyethylene industry will intensify

    With an annual production capacity of 2.2 million tons, the competition in the polyethylene industry will intensify

    • Last Update: 2023-01-06
    • Source: Internet
    • Author: User
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    According to publicly available project planning information, the polyethylene industry may release 2.
    2 million tons/year of production capacity in less than two months
    .
    This is undoubtedly "worse"
    for the already competitive polyethylene market.
    At that time, industry competition will intensify, and costs will be inverted or become the
    norm.

    As China's polyethylene enters the era of large-scale refining and capacity expansion, production capacity has increased
    significantly.
    At the same time, most of the new investment resources are low-priced products
    .
    2021 is a year of concentrated expansion of polyethylene capacity, with a new production capacity of 4.
    4 million tons/year, and a capacity growth rate of 20%.

    According to the plan, the new production capacity of polyethylene this year is 3.
    95 million tons / year, and as of the end of October, the production capacity has been put into operation of 1.
    75 million tons / year, and there are still 2.
    2 million tons / year of production capacity to be put into operation this year
    .
    In addition, in 2023~2024, there are still 4.
    95 million tons/year of equipment production plans in China, of which a total of 3 sets of plants are planned to be put into operation in 2023, involving a production capacity of 1.
    8 million tons/year
    .
    If the above production capacity is put into operation as scheduled, the polyethylene market will become more and more involuted
    .

    The concentrated release of production capacity will increase the operating pressure of polyethylene production enterprises
    .
    The market situation of polyethylene in the first October of this year can be described as the most sluggish overall performance since 2008
    .
    In the first half of the year, affected by the continuous rise in international crude oil prices, the cost side was strongly supported, and the average price of the polyethylene market was higher than the same period
    in 2021.
    However, after entering the second half of the year, the performance of the polyethylene market was not satisfactory, and even the price hit a new low in nearly two years in August, and the "Golden Nine Silver Ten" also had a sluggish peak season
    .
    In particular, oil-based polyethylene continues to be in a state of cost inversion due to high costs, and even in the best-selling season, this situation has not improved much, with a loss of about
    1,000 yuan per ton of product.
    In addition, due to the repeated impact of the epidemic, the inventory pressure of production enterprises is greater, which may trigger a price war
    .

    At the same time, due to the comprehensive impact of the tightening of monetary policy in Europe and the United States, geopolitical conflicts and the spread of the epidemic in many places, the international economic situation is grim
    .
    Therefore, the overall reduction of polyethylene downstream orders, the momentum of terminal factory replenishment has dropped significantly, and the low inventory operation mode is maintained most of the time, thereby inhibiting polyethylene demand
    .
    In addition, with the continuous strengthening of the implementation of the ban and restriction order, degradable plastics will also replace some of the demand
    in the field of polyethylene packaging.

    On the whole, downstream demand is difficult to boost, and with the release of new polyethylene production capacity, the domestic polyethylene market has a strong atmosphere of involution, and it may be full of gunsmoke before the establishment of a new supply and demand balance
    .

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