Production capacity continues to grow rapidly
China's olefin industry started in the 1960s and has grown very rapidly. The ethylene production capacity has increased from 4.422 million tons in 2000 to 23.465 million tons in 2017. It is the world’s second largest ethylene producer after the United States, accounting for global ethylene production capacity. 13.8%. It is estimated that by the end of the “Thirteenth Five-Year Plan”, ethylene production capacity will exceed 32 million tons. Propylene production capacity will grow faster, from 502 million tons in 2002 to 33.96 million tons in 2017, and is expected to be the “Thirteenth Five-year Plan”. Propylene capacity reached 42 million tons.
The amount of equivalent imports is still relatively large. In 2017, the ethylene production was 18.24 million tons, and the equivalent consumption was about 42.5 million tons. It is estimated that about 20 million tons of ethylene downstream derivatives will still need to be imported by 2020. The output of propylene is 27.36 million tons, equivalent consumption. The amount is about 34.68 million tons, and the gap is more than 7 million tons. It is estimated that about 7 million tons of propylene and downstream derivatives will still need to be imported by 2020.
Large-scale, integration, and basement trends appear. With the start of production of large-scale ethylene plants in China and the expansion and reconstruction of existing plants, the average size of steam cracking ethylene plants has continuously increased to reach 336 thousand tons (excluding Beijing Oriental Ethylene The number of vehicles waiting for parking has increased by 40% compared to 2008 and is also higher than the world average (585,000 tons).
The trend of diversification of market competition players is even more pronounced. With the integration of YPC, Sinopec Shell, Sinopec Tianjin Petrochemical, Fujian United Petrochemical, Sino-Korea Petrochemical and other ethylene joint ventures put into operation, and Shenhua Baotou, Zhongyuan Ethylene and Ningbo Yongyuan etc. In the production of coal (methanol) olefins project, China's ethylene market has formed a pattern of four major supply systems: state-owned enterprises, joint ventures, coal (methanol) olefins producers and importers.
The cracking of raw materials is lighter and the pace of quality improvement is quickened. Under low oil prices, naphtha produces more room for olefins. The adjustment of refining structure allows more low-cost high-quality raw materials to enter the ethylene cracker. In recent years, ethylene production The company also made great progress in strengthening the organization and utilization of lightweight high-quality raw materials such as oilfield light hydrocarbons, condensate oils, and refinery light hydrocarbons, accounting for a year-on-year growth, reaching 25.7% in 2017.
What are the challenges from a big country to a strong country?
On the whole, China's olefin industry is developing rapidly, and is progressing from the goal of olefin producing countries to olefin producing countries. However, it also faces many challenges.
The release of new chemical production capacity in North America will gradually release the competition pressure in China's chemical market. Since 2009, with the large-scale development of shale gas, the US natural gas price has dropped to around US$3 per million British thermal units, and the raw material cost of ethane Advantages are significant. Driven by profit, the United States has initiated an upsurge in investment in crackers. In 2017, a total of three new crackers were put into operation, with a total capacity of 3.55 million tons. This is the first time that the United States has started production of a new cracker since 2002. In the next few years, the United States Multiple sets of new crackers will also be put into operation (as listed in Table 1). The large release of ethylene production means the rapid growth of downstream derivative capacity. In 2018, North America's polyethylene excess capacity exceeded 4.5 million tons. During the same period, polyethylene supply and demand in Central and South America With a large gap, North American surplus products will flow into Central and South America. However, with the reduction of the supply and demand gap in South America in 2020, the surplus in the Americas will reach more than 3 million tons. North American producers will surely participate in the Asian market competition. There are two in the United States in 2017. The propane dehydrogenation unit will be put into operation, with an additional 1.5 million tons of propylene production capacity. The new propylene plant will be put into production in 2018, and the market will show an oversupply situation. Manufacturers consider exporting to address the local oversupply situation. Low-cost natural gas feedstocks significantly increase the export competitiveness of ethylene, propylene and downstream derivatives in North America, affecting global trade and market prices.
The pace of development of the ethylene industry in the Middle East has slowed down, and downstream products still have the strongest cost advantage. With the increase in the cost of construction in the Middle East and rising natural gas prices and resource shortages, the growth rate of ethylene capacity in the Middle East will fall to 3.6% in 2011-2016. Due to the volatile political situation in the Middle East and other uncertainties, the construction of petrochemical projects may continue to be delayed. It is expected that the annual growth rate of production capacity will further drop to 2.6% from 2016 to 2020. Despite the slow pace of development of the ethylene industry, raw material prices have increased by 1.3 times. The Middle East is still the region with the lowest ethylene production cost in the world, and it still maintains its absolute competitive advantage. The impact on China's downstream ethylene product market continues.
China's private enterprises have made great strides in the petrochemical industry, and their influence has continued to climb. Chinese private enterprises have become the main force in the field of polyester and synthetic fibers. Not only that, some powerful private enterprises are still marching into the upper reaches of the industry chain, with the help of refining and chemical The project will build a crude oil-p-xylene-terephthalic acid-polyester-polyester filament-chemical fiber manufacturing industry chain. One of the most closely watched projects is Zhejiang Petrochemical Co., Ltd.'s large-scale refining and chemical integration project in Zhoushan. On May 8, 2017, it was formally approved by Zhejiang Provincial Development and Reform Commission. The project was constructed in two phases. The scale of each phase was 20 million tons of oil refining, 4 million tons of paraxylene, and 1.4 million tons of ethylene and downstream chemical plants. The total investment of the project was 1730.9. Billion yuan, the construction period is 2017-2021. The first phase of the project was started in July 2017 and will be put into operation by the end of 2018. In addition, the Shenghong Group's refining and chemical integration project at the Lianyungang Petrochemical Industrial Base in Jiangsu Province is also undergoing approval. Publicity: The project plans to have a total scale of 16 million tons of oil refining, 2.8 million tons of paraxylene and 1.1 million tons of ethylene and a tour chemical plant. Hengli Petrochemical 20 million tons of refining and chemical integration project It has entered the construction and installation stage. These projects not only have a high starting point, but also have a reasonable layout, economies of scale, advanced technologies, and optimized product solutions. They maximize the advantages of refining and chemical integration, and they have a flexible mechanism, quick action, and a project construction cycle. Short, the market responds quickly.
China's coal chemical industry entered the adjustment period, but its impact on petroleum olefins continued. Since the first coal-based olefin plant was put into operation in 2010 at Shenhua Baotou Coal Chemical Company, coal chemical industry has developed rapidly. By the end of 2017, total ethylene production capacity reached 453 Ten thousand tons, the total propylene production capacity reached 8 million tons. With the drop of crude oil prices, the continuous improvement of domestic environmental protection standards, and water resources and other issues, the coal-to-olefins/methanol-to-olefins project has lost its advantages. Although it is currently under construction and planning phase The production capacity exceeds 10 million tons, but under the low oil price, the proportion of production capacity that can be put into production on schedule is very small. At the same time, we must note that the cost of coal to olefins is affected little by the oil price fluctuations. Under the low oil price of 35~55 USD/barrel, Oil olefins have obvious cost advantages, and they have a large profit margin, while coal-to-olefins can also achieve the balance between cash and oil; when the oil price is between 65 and 75 US dollars/barrel, the cost of coal to olefins is the same as the cost of naphtha to olefins, and has a better profitability. In addition, the coal-to-olefins companies are striving to expand the downstream polyolefin product categories. For example, Zhongtian Hechuang 120,000-ton Kettle Process LDPE can produce high VA content EVA. Therefore, Long or product structure, coal to olefins have had an impact, it is worth attention.
The demand for petrochemical products continued to grow, and more emphasis was placed on product quality, performance and variety. China's ethylene downstream market is facing the impact of low-cost petrochemical products in the Middle East. On the other hand, the high-end market is dominated by imports from Europe, Japan, and the United States. With the introduction of new production capacity, the cost of homogenous products will appear, and the differentiation of high-end products will become more and more fierce. The quality, variety, and functionality of the products will be higher, updated and more detailed. For the petrochemical industry, it is necessary to further intensify the transformation capability of independent innovation and scientific and technological achievements, from the pursuit of quantitative growth to the pursuit of qualitative improvement and structural optimization and adjustment, so as to increase market response and the ability to create profit, and to achieve business efficiency.
Measures to increase competitiveness
Optimize the layout of the industry. The layout should be integrated as much as possible and be based on the base. Through the mutual supply of materials and the sharing of public projects, the resources can be fully optimized and reasonably used, thereby reducing operating costs and achieving intensive operations. When layout, resources should be comprehensively considered. And market advantages, we must pay more attention to the impact of logistics conditions on competitiveness. With the development of the olefin industry, regional markets tend to be saturated and products are sold more often than overseas. In addition, resources can be considered Transfer of market advantages overseas. For example, in the Middle East or North America, natural gas methanol production projects or propane dehydrogenation projects are used as raw materials for domestic installations, or to comply with the 'One Belt and One Road' initiative, especially the Central Asian Gasoline Production to Olefins project, to reduce raw material costs.
Accelerate structural adjustment and upgrade. The naphtha cracking to olefin industry has developed in China for more than 50 years, and it has been continuously improved and matured. From the past, the incremental increase has been mainly attributed to the improvement of stocks, and the incremental adjustment period has been strengthened. Some profitability is poor. The equipment will be eliminated. In coal (methanol) chemical industry, propane dehydrogenation enterprises are still in the development stage, and they need to continuously improve the technology and upgrade the operation level of the equipment, change the rough development model in the past, attach importance to energy conservation and environmental protection, and innovate construction operation mode, and refine raw material processing. Paths, improve resource utilization, reduce costs. Downstream product design must strive for differentiation, high-end, while naphtha to olefins, coal to olefins to make full use of the advantages of diversification of by-products, do carbon four, carbon five and Comprehensive utilization of aromatic hydrocarbons to enhance competitiveness.
Strengthen the integration of the two technologies. Utilize next-generation information technology such as big data and cloud computing to speed up structural adjustment and improve the quality and efficiency of the reform process. Use information technology and monitoring technologies to strengthen information management services, improve the controllability of production processes, and reduce production lines. Manual intervention and rational planning. With the help of energy Internet and supply side reforms, we can precisely match the needs of the consumer market, proactively grasp cutting-edge information, strengthen strategic cooperation with sales companies and end users, maximize opportunity profits, and improve supply quality and efficiency.
Adhere to scientific and technological innovation. Strengthen forward-looking, strategic and fundamental research and technological research, do a good job of technical reserves, provide innovation and lead. Emphasis on the use of high value-added natural gas, strengthen research and development investment in methane to ethylene and syngas to olefins, Strive to make breakthroughs in catalysts and other core technologies and solve engineering and technical problems, and realize industrialization and application as soon as possible. Innovate and develop high-end products such as high-performance resins, specialty rubbers and elastomers, high-performance fibers and composite materials, and functional film materials.
Take the green sustainable development road. A series of environmental protection policies and regulations require that we must pay attention to environmental protection, energy conservation, emission reduction, water saving and other links, and we must overcome some of the technical bottlenecks that restrict the green development of the industry to meet the more stringent environmental protection requirements in the future. At the same time, developed countries continue to raise their green barriers and gradually limit the production and use of high-emission, high-environmental risk products. This poses greater challenges to the participation of China's petrochemical industry in international competition.