PX added 17.6 million tons, and ethylene glycol’s external dependence dropped to a new low in more than ten years! The chemical fiber leader is involved in refining and chemical integration, which is changing the fate of polyester raw materials!

The upstream of the polyester industry is petrochemicals. The petrochemical industry is a capital and technology-intensive industry with high investment intensity and high industrial correlation.

In May 2015, the National Development and Reform Commission issued the “Petrochemical Industry Planning and Layout Plan”, proposing that my country will build seven major petrochemical industry bases, including Ningbo in Zhejiang, Changxing Island in Dalian, and Lianyungang base in Jiangsu. In July 2018, my country passed the “Petrochemical Industry Planning and Layout Plan”, which requires safety and environmental protection to be given priority, and supports private and foreign-owned enterprises in wholly-owned or controlling investments to promote industrial upgrading.

Benefiting from favorable policies, my country’s leading polyester companies have set off a wave of “upstream extension” in recent years and have invested in the construction of large-scale refining and chemical integration projects. From 2019 to the present, our country has ushered in a round of commissioning cycles for large-scale refining and chemical integration projects.

PX—PTA—polyester, this industrial chain has always been affecting the nerves of the polyester industry. Large polyester companies have been involved in refining and chemical integration projects, and they are also changing the fate of polyester raw materials earth-shakingly!

PX adds 17.6 million tons of new production capacity

The self-sufficiency rate has been greatly improved

First of all, it has greatly improved my country’s PX self-sufficiency rate.

my country is the world’s largest consumer of PX. PX is a raw material for the production of PTA. In the past 10 years, my country’s PTA production has increased rapidly, which has greatly increased the demand for PX. However, the PX required by Chinese enterprises has been mainly imported from Japan, South Korea and Taiwan, China for a long time. my country’s PX import dependence has been as high as over 50% for many years.

Statistical data shows that my country’s PX import volume in 2018 was approximately 15.903 million tons, and the import dependence reached a peak of 61.31%. Since 2019, as private refining and chemical projects have gradually come into operation, my country’s PX production has increased rapidly, reaching 14.26 million tons in 2019, an increase of 119% from the production of approximately 6.5 million tons in 2010, and import dependence dropped to 41.39%. From 2019 to September 2022, my country’s PX production capacity increased by 18.42 million tons, reaching 32.68 million tons. From 2022 to 2024, my country’s new PX production capacity is expected to be approximately 17.6 million tons.

External dependence dropped to a new low in more than ten years

The ethylene glycol industry is “no longer in glory”

At the same time, as the country vigorously promotes integrated coal chemical and refining projects, China’s ethylene glycol production capacity has grown rapidly in recent years. The growth in production capacity has led to an increase in the self-sufficiency rate, and China’s ethylene glycol import dependence has been significantly reduced. In 2022, China’s ethylene glycol import dependence will drop to 36%, a decrease of 5 percentage points from 2021, and a new low in more than ten years.

China is a major producer and exporter of textiles, as well as a major consumer of textile raw materials. Due to insufficient production and demand, China’s chemical fiber raw materials have long been dependent on imports, and import dependence is generally high. In 2010, China’s import dependence on ethylene glycol was as high as 80%. In the past ten years, China’s ethylene glycol production capacity has achieved an average annual growth rate of 23%, growing to 24.972 million tons in 2022, a five-fold increase from 2013 ten years ago (see Figure 1), and the self-sufficiency rate has increased significantly. In 2022, China’s ethylene glycol import dependence will be 36%, a decrease of 5 percentage points from 2022, and a decrease of 44 percentage points from 2010.

With the rapid expansion of production capacity,the market is undergoing earth-shaking changes, the most obvious of which isthe ethylene glycol industry in recent years” The glory is no longer”, corporate profits have declined significantly, and even losses have occurred. In 2022, ethylene glycol will face greater pressure from both supply and demand, and prices will fall significantly. The average annual price in 2022 will be 4,538 yuan/ton, a decrease of more than 13% from 2021. While prices are weakening, as the costs of crude oil and coal remain high, and the performance of downstream polyester is weak, polyester factories are highly resistant to the cost transmission of ethylene glycol. Therefore, ethylene glycol profits were greatly compressed during the year. The profits of the industrial chain are diverted to upstream raw materials, polyester end and PTA, and ethylene glycol as a whole has entered a state of loss.

However, an engineer from a Zhejiang polyester company said that in recent years, large polyester companies have focused on building a deeply integrated development model of “crude oil-aromatics and olefins-PTA and MEG-polyester-spinning” to continuously achieve high-quality Efficient production, large-scale cost advantages and industrial chain synergy advantages continue to increase, the scale continues to expand, and the strength continues to increase. At the same time, as a number of old small and medium-sized production capacities gradually withdraw from the market, the comprehensive advantages of “head” enterprises have become increasingly prominent, and the concentration of the polyester market has further increased.
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