China Tried to Produce Polyolefin from Diversified Raw Materials in 2011   

By Zhong Weike, China National Chemical Information Center

PE output grew slightly, but PP output increased vigorously

According to the China Petroleum and Chemical Industry Association statistics, in the first 11 months of 2011, the output of polyethylene (PE) in China was 9.24 million tons, up only 2.3% year on year (yoy); and the output of polypropylene (PP) was 8.68 million tons, up 6.6% yoy. In 2011, China's new PE capacity was only 100 000 t/a, while its total PE capacity reached 10.37 million t/a; and its new PP capacity was 1.42 million t/a, while its total PP capacity reached 12.71 million t/a.

Polyolefin was produced from diversified raw materials

Among the new olefin projects in 2011, three were based on the MTO (methanol-to-olefins) technology. Plus the capacity of Shenhua Baotou CTO (coal-to-olefins) project which was put into operation in the end of 2010, the MTO-based polyolefin capacity in China totaled 1.8 million t/a. Although these MTO projects only account for less than 8% of China's total olefin capacity, their successful operation gives huge encouragement to other MTO projects which are under construction or planning. According to incomplete statistics, 36 proposed CTO/MTO projects have been already announced in China, and the majority of them take polyolefin as the end products. It was reported that if these projects are completed on schedule, they can increase China's total PE capacity by 5.7 million t/a and its total PP capacity by 8.3 million t/a by 2015.
                                        
Table 1  New polyolefin capacity in China in 2011      ( thousand t/a)
Product    Producer    New capacity    Commissioning date
LLDPE    Sinopec Zhongyuan Petroleum Chemical Co Ltd    100    September 2011
PP    Shenhua Ningmei Chemical Co Ltd    500    May 2011
PP    Zhejiang Hongji Petrochemical Co Ltd    120    August 2011
PP    Sinopec Beihai Refinery    200    December 2011
PP    Sinopec Zhongyuan Petroleum Chemical Co Ltd    100    September 2011
PP    Datang Duolun MTP project    500    The fourth quarter of 2011
                                          
Table 2 Major proposed MTO-based polyolefin projects in China     (kt/a)
Investor    Location    Olefin capacity    PE capacity    PP capacity    Startup date                                                                                                         
Shanxi Coking Coal Group    Hongdong, Shanxi province    600    300    300    Q2 of 2014
Sinopec Guizhou Petrochemical Company    Bijie, Guizhou province    600    300    300    2013
Yanchang Petroleum Group    Jingbian,  Shaanxi province    600    600    600    
Yanchang Petroleum Group Yan'an Energy Chemical Company    Fuxian County, Shaanxi province    600    450    250    2015
Ningbo Heyuan Chemical Co Ltd    Ningbo, Zhejiang province    300    0    300    Early 2012
Zhejiang Xingxing New Energy Technology Co Ltd    Jiaxing, Zhejiang    1800    0 300    The end of 2013
China Coal Group Yili Coal Power & Chemical Co Ltd    Yili, Xinjiang    600    300    300 2013
Shenhua Xinjiang Ganquanbao Industrial Park    Ganquanbao, Xinjiang    680    300    380 2015
Qinghai Qinghua Mining, Metallurgical and Coal Chemical Group Co Ltd    Qinghai province    600    270    0    Before 2015
Inner Mongolia Mengda New Energy and Chemical Base Development Co Ltd    Inner Mongolia    600    300    300    
Total            2820    4430    

   In 2011, many propane dehydrogenation (PDH) projects to make propylene were also announced in China, mostly aiming at the PP market. These projects include: China Flexible Packaging Group's 800 000 t/a PP project in Fuqing, Fujian province, which started construction in May 2011; and Jiangsu Changjiang Gas Chemical Co Ltd's 660 000 t/a PP project in Rugao, Jiangsu province, whose investment agreement was signed in August. In addition, Tianjin Bohua Petrochemical Co Ltd, Zhangjiagang Yangtze Petrochemical Co Ltd, Zhejiang Julong Petrochemical Co Ltd and Zhejiang Haiyue Co Ltd all also announced or started PDH projects in 2011.
   There were no new steam cracker-based ethylene projects in China in 2011, but there will be such projects in 2012-2013. For example, PetroChina Daqing Petrochemical Company, PetroChina Sichuan Petrochemical Company, PetroChina Fushun Petrochemical Company, Sinopec Wuhan Ethylene Plant and CNOOC Huizhou Refinery will build such projects in 2012-2013.

Average price rose

In 2011, polyolefin prices in China reached peaks in April and July. Since September, the prices declined sharply. However, the overall average polyolefin price was higher in 2011 than in 2010, and its growth was roughly equal to that of imported resins.

Imports were relatively steady, while exports grew sharply

In the first 11 months of 2011, China imported 3.4 million tons of PP (not including high-impact PP, hereinafter the same), down 2.1% yoy, and exported 155 000 tons, up 103% yoy; it imported 6.738 million tons of PE, up 0.5% yoy, and exported 305 000 tons, up 114% yoy. Among PE imports, the imports of LDPE and LLDPE increased, but the import of HDPE decreased. In the same period of time, the net import volume of other