FLANDERS INVESTMENT & TRADE MARKET SURVEY

PETROCHEMICAL AND

CHEMICAL INDUSTRY

IN CHINA

China’s Petrochemical And Chemical Industry

Flanders Investment & Trade Guangzhou

2

Content

1. General Introduction ………………………………………………………………………………………………………………..…… 3

2. Petrochemical Industry …………………………………………………………………………………………………………………. 6

3. Chemical Energy …………………………………………………………………………………………………..……………………… 11

4. New Chemical Materials ……………………………………………………………………………………………………………… 16

5. Chemical Industrial Parks ……………………………………………………………………………………………………………. 23

6. Additional Information ……………………………………………………………………………………………………………….. 25

China’s Petrochemical and Chemical Industry 3

1. General Introduction

Since 2000, the scale of China’s chemical industry has been the world’s no.1; its main business revenue

is estimated to reach CNY 9.5 trillion in 2015 (increased by 86.6% from that of 2000) and CNY 19.5

trillion in 2020. In the first half of 2015, China’s petroleum and chemical industry’s imports were worth

USD 175.6 billion, with a decreasing rate of 28.5%. The industry’s top 5 provinces are the eastern

coastal Shandong, Jiangsu, Guangdong, Zhejiang and Liaoning, each of them outputs over CNY 500

billion and their subtotal exceeds 50% of the country’s gross amount.

In the recent years, China’s achievements are mainly represented by the following projects:

oil refining at 10 million tons / year

production of ethylene from catalysis and heavy oil cracking at 500000 tons / year cpp

liquid phase hydrogenation of diesel at 2.6 million tons / year

production of ethylene at 1 million tons / year

production of pta fully with own know-how at 1 million tons / year

production of coal-base methanol at 500000-600000 tons / year

production of coal-to-olefin at 600000 tons / year

production of coal-to-propylene at 500000 tons / year

production of acrylic acid and acrylic ester, isobutylene isoprene rubber, with own know-how

In the coming years, China mainly needs the following projects in the chemical industry:

production of coal-to-natural gas at 4 billion m3 / year

production of ethylene glycol at 200000 tons / year

production of indirect coal-to-oil at 1.8 million tons / year

refining at 15-20 million tons / year

production of methyl alcohol (or synthetic ammonia) at 1 million tons / year

big production of potash fertilizer

big desulfurization and denitrification

Capacity utilization of China’s production of traditional chemicals in 2014

Description Capacity utilization rate

process of crude oil 66%

sodium hydroxide 81%

sodium carbonate 81.4%

Urea 81.5%

ammonium dihydrogen phosphate 71.9%

diammonium hydrogen phosphate 81.3%

calcium carbide 62.2%

Pat 61.1%

Methanol 64%

acetic acid 70.2%

silicone methyl monomer 58%

hydrochloric acid 45%

polymerized styrene butadiene rubber 64%

cis-polybutadiene 48%

Polypropylene 74.1%

polyvinyl chloride 68%

4

Polyformaldehyde 44%

China’s annual output capacity and self-efficiency of its key in-shortage chemicals (10000 tons)

China’s output of key chemical products in first half of 2015

Description Volume Increasing rate

chemical fertilizer (net) 37.06 million tons 6.5%

sodium hydroxide 15.203 million tons - 1.9%

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Estimated average increasing rate of China's demands for chemicals in 2014-2020

17923200

47%62%

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80%

0

1000

2000

3000

4000

2013 2020

Ethylene %

526

1200

31%

60%

0%

20%

40%

60%

80%

0

500

1000

1500

2013 2020

Ethanediol %

486620

54%

59%

50%

52%

54%

56%

58%

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0

200

400

600

800

2013 2020

Potassic fertilizer %

280

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46%

76%

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400

600

2013 2020

Engineering plastics %

17923200

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2013 2020

Ethylene %

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69%

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2013 2020

PX %

320

560

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Spe. synthetic rubber %

China’s Petrochemical and Chemical Industry | November, 2015 5

ethylene 8.45 million tons 2.3%

tyre 455 billion pcs - 3.9%

synthetic materials 59.74 million tons 9.0%

To more utilize the strengths of its resources, China plans to increase the diversification of raw

chemicals as below:

Description Diversification (% of output volume of non-petroleum-based products)

2013 2020

gasoline 5% 7.2%

diesel 2% 7%

ethylene 4% 29%

propylene 9% 48%

ethanediol 5% 57%

On the chemical industry, China’s 13th Five-year (2016-2020) Plan focuses on 4 fields:

1. Petrochemistry – focusing on refining, the production of olefin, aromatic hydrocarbon and

organic chemicals

2. New chemical energy – focusing on the production of synthetic natural gas, coal-to-liquids,

coal-to-alcohol ether fuel (methanol fuel, ethanol fuel, methyl ether, polyoxymethylene

dimethyl ethers), biomass new energy (biobase ethanol fuel, biodiesel) and coal’s grading

conversion

3. New chemical materials – focusing on the production of engineering plastics, high-end

polyolefins plastics, high-performance rubber materials, polyurethane, fluorine silicon

materials, high-performance fiber, high water absorption materials, functional membrane

materials and electronic chemicals.

4. Upgrade of the traditionals – focusing on chemical fertilizer, pesticide, chlor alkali, sodium

carbonate, tyre and inorganic salt.

The aims of China’s 11th Five-year (2006-2010) Plan on energy-saving and emission-reduction in the

chemical industry were not achieved, the following of the 12th Five-year (2011-2015) Plan will possibly

not be achieved either:

reduction of the energy consumption by 15%

reduction of COD and NOx by 10%

reduction of the emission of ammonia nitrogen by 12%

reduction of the emission of CO2 by 8%

These difficult duties will have to be shifted to the next 5 years again, mainly on the treatment of

phosphogypsum slag, calcium carbide slag, yellow phosphorus slag, alkali slag, waste gas, waste water

with pesticide, dye or organic intermediate and emission of CO2.

6

2. Petrochemical Industry

China’s petroleum refining made an output of 715 million tons in 2014, which was the No.2 in the

world after the U.S.A. and 15% of the global figure; its annual average increasing rate in the past decade

was 7.7%; it has already witnessed over-capacity. China’s processed oil is basically self-sufficient.

There are 196 petroleum refineries in the country with an average capacity of 3.65 million tons / year

for one refinery, which is only 50% of the world’s average. The ration between China’s demand for

diesel and gasoline is estimated to decrease to 1.4 in the coming years. The imported petroleum in

China will be used more for production upgrade and more open for smaller and private refineries. The

country is in great demand of technologies on refining sulfur and acid-bearing heavy and inferior crude

oil, and pushing new quality standard on gasoline and diesel which sets the maximum sulfur content

as 10 ppm. In the country, the production of clean gasoline basically means desulfuration of catalytic

cracking gasoline and reduction of olefin.

China’s leading petroleum refiners are:

www.sinopec.com

www.cnpc.com.cn

www.cnooc.com.cn

www.chemchina.com.cn

www.sxycpc.com

www.norincogroup.com.cn

www.sinochem.com

China’s top 7 petrochemical bases are:

Caojing, Shanghai City

Ningbo, Zhejiang Province

Huizhou, Guangdong Province

China’s Petrochemical and Chemical Industry | November, 2015 7

Gulei, Fujian Province

Xizhong Island, Liaoning Province

Caofeidian, Hebei Province

Lianyungang, Jiangsu Province

Ethylene

In 2014, for ethylene in China, the output capacity was 20.79 million tons (estimated to be 32.3 million

tons in 2020), the output volume was 18.503 million tons (estimated to be 29.7 million tons in 2020),

the import volume was 1.497 million tons, the import volume converted from downstream derivatives

was 17.4 million tons.

The break-down of China’s import of ethylene in 2013

Origin Ethylene monomer Polyethylene Ethylene glycol Styrene

Middle East 0.7% 50.5% 57.9% 26.5%

Asia Pacific * 99.3% 37.5% 31.9% 65.9%

North America 0% 5.0% 9.3% 5.9%

Europe 0% 4.3% 0.9% 1.7%

Others 0% 2.7%

* Mainly from South Korea and Japan, a little from Taiwan Island.

8

Leading producers of ethylene in China are:

www.sinopec.com

www.cnpc.com.cn

www.cnooc.com.cn

www.norincogroup.com.cn

www.chemchina.com.cn

www.shenhuachina.com

www.fundenergy.com.cn

www.wison.com

www.sxycpc.com

www.chinacoal.com

0

500

1000

1500

2000

2500

3000

3500

2014 2020

Raw material diversification of China's ethylene production (10000 tons)

Others Methanol to olefin Coal to olefin Steam cracking

1850

850

140

830

70Origins of ethylene equivalent consumed in China in 2014 (10000 tons)

China Middle East North American Asia Pacific Others

China’s Petrochemical and Chemical Industry | November, 2015 9

www.baofengenergy.com

www.shccig.com

www.legendholdings.com.cn

Propylene

In 2014, for propylene in China, the output volume was 18.75 million tons, the equivalent consumption

volume was 27.8 million tons, import is in need.

Leading producers of propylene in China are:

www.chinadhe.com

China Soft Packaging Group Holdings Ltd.

www.haiweigroup.net

www.sypcc.com

www.ytpu.com

EVA copolymer

Presently China has output capacity of 600000 tons / year for EVA copolymer, around 65% of the

demand is met by import, more output capacity of 1.4 million tons / year is under construction or

planning.

The present producers are:

www.basf-ypc.com.cn

bypc.sinopec.com

www.levima.cn/index.php?a=view&m=company&id=2

www.dfpc.com.cn

Polyethylene

In 2014, for polyethylene in China, the output capacity was 14.8 million tons (estimated to be 22 million

tons in 2020), the output volume was 12.85 million tons (estimated to be 20.9 million tons in 2020)

composed by 29 companies and 66 sets of equipments, the import volume was 9.108 million tons. For

high-end polyethylene, China annually produces around 1.6 million tons and imports around 1.75

million tons.

In 2014, for ultra-high molecular weight polyethylene in China, the output capacity was 39000 tons

(estimated to be 80000 tons in 2020), the output volume was 30000 tons (estimated to be 60000 tons

in 2020), the import volume was 24000 tons (estimated to be 30000 tons in 2020);

Leading producers in China are:

www.cnpc.com.cn/cnpc/lhqy/201404/9a5202be4c7749059f29525fc4c1013a.shtml

www.csclc.com.cn

www.cnpc.com.cn/cnpc/lhqy/201404/e4b9ecdc154846038fec903b8f2620ec.shtml

www.huajinchem.com

www.spc.com.cn

Polypropylene

In 2014, for polypropylene in China, the output capacity was 19.31 million tons (estimated to be 29

million tons in 2020), the output volume was 13.81 million tons (estimated to be 24.65 million tons in

2020) made by over 100 companies, the import volume was 5.028 million tons. China needs 65000

10

tons of high-end mPP per year which is all imported, 10000 tons of it can be produced in China in 2020

according to estimation.

Leading producers in China are:

bypc.sinopec.com

www.spc.com.cn

www.mpcc.com.cn

english.sinopec.com/about_sinopec/subsidiaries/refineries_petrochemicals/20080326/3042.shtml

www.lypcc.com.cn

China’s Petrochemical and Chemical Industry | November, 2015 11

3. Chemical Energy

Statistics on China’s major energy chemicals (10000 t/a)

Description 2014 2020 (estimated)

Output capacity

Output Import Export Consumption Output capacity

Output Consumption

direct liquefaction coal-to-oil

108 90 441 406

indirect liquefaction coal-to-oil

60 31 912 866

methyl alcohol- to-gasoline

70 50 285 171

coal-to-natural gas

27 6 372 298

methyl alcohol

6860 4250 433 75 4608 9000 7650 8450

methyl ether

1350 500 0 0 500 1500 800 800

synthetic ammonia (net)

7705 5699 20 1 5718 8000 6400 6400

urea (net)

3872 3218 3 626 2595 4450 3700 3000

phosphatic fertilizer (net)

2350 1685 30 405 1310 2400 1750 1550

potash fertilizer (net)

600 557 503 21 1039 700 650 1150

Methyl alcohol

Raw materials of China's production of methyl alcohol in 2014

Non anthracite coal

Anthracite coal

Natural gas

Coke oven gas

12

In 2014, China’s consumption volume of methyl alcohol was 46.86 million tons, with an annual

increasing rate of 27% in the recent years. For big methyl alcohol production company at annual

output capacity over 300000 tons, there are nearly 70 in the country. China requires that any of its

new coal-to-methyl alcohol project should have output capacity of at least 1 million tons / year, that

for new coke oven gas-to-methyl alcohol project should be at least 0.1 million tons / year. The country

prohibits new production of methyl alcohol and its downstream products with natural gas.

Methyl ether

China has over 80 methyl ether production companies at gross annual output capacity of 13.5 million

tons and gross output volume (same as the actual consumption volume) of 5 million tons in 2014, the

main production process of methyl ether is dewatering of methyl alcohol. In China, 97% of methyl

ether is used as fuel and it will be promoted as household fuel for remote areas to replace coal and

LPG, methyl ether for automobiles has not been commercialized but will be developed more. Pipe

transport of methyl ether and methyl ether as petrochemical raw material will be developed.

Clean and high-efficiency conversion of coal

China’s top 5 coal production regions

Region/Province Output volume in 2013 (100 million tons)

Inner Mongolia 9.9

Shanxi 9.6

Shaanxi 4.9

Guizhou 1.9

Xinjiang (estimated) 1.6

At the end of 2012, China had 1.42 trillion tons of identified coal reserves.

China’s top 4 coal chemical bases are:

China's downstream products consuming methyl alcohol in 2014

Traditionals like formaldehyde and aceticacid

Alcohol ether fuel

Methyl alcohol to gasoline

Methyl alcohol to olefin

Others

China’s Petrochemical and Chemical Industry | November, 2015 13

http://www.ningdong.gov.cn

http://www.dlmhg.gov.cn

http://www.ysia.gov.cn

http://www.kalamaili.com

For coal-to-oil, China has 8 production companies (1 for direct liquefaction, 2 for indirect liquefaction

and 5 for methyl alcohol-to-gasoline) at gross annual output capacity of 2.28 million tons (1.08 million

tons for direct liquefaction, 0.5 million tons for indirect liquefaction and 0.7 million tons for methyl

alcohol-to-gasoline) and gross output volume of 1.72 million tons in 2014. The turnover for 1 ton of

direct liquefaction coal-to-oil is CNY 4963.00, that for 1 ton of indirect liquefaction coal-to-oil is CNY

7625.00, that for 1 ton of methyl alcohol-to-gasoline is CNY 9300.00.

For coal-to-natural gas, China has gross annual output capacity of 5.2 billion m3 (3.1 billion m3 for coal-

to-natural gas, 2 billion m3 for coke oven gas-to-natural gas mainly using the technology of coke oven

gas-to-methane, 0.05 billion m3 for production of chemical fertilizers-to-natural gas mainly using the

technology of extraction from waste gas of synthetic ammonia) and output volume of 1.3 billion m3 in

14

2014. The gross annual output capacity will reach 70.2 billion m3 in years. The leading companies

running coal-to-natural gas projects in China are:

xj.chinakingho.com

www.huinenggroup.com

www.china-cdt.com (the projects are at the area of Hexigten Banner and Fuxin City)

In 2014, China’s consumption volume of natural gas was 192.3 billion m3; it was annually raised by 10-

20 billion m3 in the past decade, mainly in the sectors of city supply and transport with LNG and CNG;

the use of NGL is also growing. In 2020, the supply of natural gas to Chinese market may reach 420

billion m3, the domestically produced volume may be 185 billion m3 of conventional natural gas, over

30 billion m3 of shale gas, and nearly 30 billion m3 of coalbed methane. Import of natural gas is

important to China, as its own output of mined natural gas (shale gas and coalbed methane) is difficult

to increase.

Coal represented 75.6% of China’s production of primary energy in 2013, and may represent 47% of

the production and 40% of the consumption in 2050. Presently, the transport of coal in China is mainly

made by train. To utilize coal more cleanly, the country is developing more bases in the West to

convert coal to oil and natural gas locally then transport them to the East, the gross volume of gas for

this transport is planned to reach 40 billion m3 annually in the coming decade. Pipes for transport of

coal water slurry are also being developed.

The following are the key relative technologies China needs:

Comprehensive utilization of coal’s chemical constituents

Joint production and its peak shaving of liquid fuel, chemicals, electric power and thermal

energy

Optimization of the utilization of coal and petroleum by means of coal-to-hydrogen, joint

refinery of petroleum and coal, etc

Efficiency raise of coal process

Joint gasification of coal and biomass, integration of windpower-to-hydrogen and coal

chemistry, conversion of CO2 by chlorophyte (mainly for the Northwest regions), oil and gas

driving by CO2 (may be first realized at Ordos Basin, Ningdong Town at Ningxia Region, and

Yiminhe Town at Inner Mongolia Region)

Nitrogen fertilizer

For synthetic ammonia, China had gross annual output capacity of 74.17 million tons (80.70 million

tons for urea) and output volume of 60.53 million tons (45.53 million tons for nitrogen fertilizer) in

2014; the production suffers from serious seasonal overcapacity, and is being moved to coal-rich

regions like Inner Mongolia, Xinjiang, Shanxi. China’s export of urea is strong, at 13.62 million tons in

2014. The structure of raw materials for synthetic ammonia is more optimized as 52% for anthracite,

24% for non anthracite coal and 23% for natural gas and coke oven gas. Advanced production

technologies have been widely introduced, however the domestic market demand greatly shrinks and

the business profit is very limited. The key technologies needed now are joint production of synthetic

ammonia (natural gas, methyl alcohol, clean energy, chemicals) and value-added modification of

nitrogen fertilizer.

Phosphatic fertilizer

China’s Petrochemical and Chemical Industry | November, 2015 15

For phosphatic fertilizer, China had output capacity of 23.5 million tons (net), output volume of 16.85

million tons (net) and consumption of 13.1 million tons in 2014. 71% of the production is based on the

locations of phosphorus resources. The production enjoys the world’s leading technologies, with a

phosphor gypsum general utilization rate at 27%. The problems are, over-capacity of the production,

too much relying on import of sulfur, lack of environment-friendly storage of phosphor gypsum, etc.

The key technologies needed now are those for advanced production of soluable and slow released

phosphatic fertilizer, phosphoric acid by wet method, and those for higher utilization of phosphor

gypsum.

Potash fertilizer

For potash fertilizer, China had output capacity of around 6 million tons (mainly based in Xinjiang

Region and Qinghai Province), output volume of 5.57 million tons, consumption of 10.39 million tons

(converted into K2O) in 2014, the import was therefore big in the past 5 years. China has developed

advanced technologies like solid-liquid transformation, general utilization of magnesium and lithium

resources, exploitation of insoluable potassium resources, etc. Chinese companies are construting

overseas potash fertilizer production bases in Africa, Southeast Asia, North America, Russia and

Belarus. China has 14 potash fertilizer producers, the top 3 are (each has annual production capacity

of around 1 million tons):

www.qhyhgf.com

Geermu Zangge Potash Fertilizer Co., Ltd.

www.sdiclbp.com

Value added fertilizers

These fertilizers include modified, slow released, compound and soluable fertilizers. In 2013, China’s

output volume of compound fertilizer was around 34.5 million tons. In 2014, China’s output volume

of soluable fertilizer was over 3 million tons. In the country, 16% of nitrogen fertilizer, 85% of

phosphatic fertilizer, 25% of potash fertilizer are processed into complex fertilizer; the share of

complex fertilizer in chemical fertilizer is 32%. China is also developing liquid fertilizer like UAN and

direct fertilizing with liquid ammonia. The value added fertilizers are not sufficiently promoted in the

market, they are now more used for high-end cash crops, less for field crops. China is controlling the

overall consumption of chemical fertilizers, and plans to realize zero increase of the consumption by

2020. E-commerce may be a breakthrough for the sales.

16

4. New Chemical Materials

Statistics on China’s synthetic materials in 2014 (10000 tons)

Description Output Import Export Apparent Consumption

synthetic resin 7468 2096 323 9245

synthetic fiber 3986 64 364 3687

synthetic rubber 370 160 15 516

gross of synthetic materials 11823 2321 702 13448

synthetic fiber monomer 3550 1027 63 4514

The key points of China’s development of synthetic materials are:

development of advanced macromolecular materials

development of the relative raw materials like olefin, petrochemical aromatic hydrocarbon,

coal-to-ethylene glycol and isoprene

Synthetic resin

Statistics on China’s synthetic resin in 2014 (10000 tons)

Description Output Import Export Apparent Consumption

general thermoplastic resin 4710 1166 192 5685

general thermosetting resin 1469 92 47 1513

high-performance resin 1289 838 83 2047

Total 7468 2096 323 9245

In China, the production cost of polyethylene and polypropylene is not competitive, the production of

polyvinyl chloride has to stop using mercury catalyst for environmental protection purpose, the

relative advanced technologies and advanced urea-formaldehyde resin, phenol-formaldehyde resin,

epoxy resin and acrylic resin etc are needed by the market.

Synthetic fiber

Statistics on China’s synthetic fiber in 2014 (10000 tons)

Description Output Import Export Apparent Consumption

polyester fiber 3581 24.9 274.8 3331.1

nylon 262.1 15.7 68.7 209.1

polyacrylonitrile fiber 67.7 17 9.2 75.5

spandex 44 2.5 4.5 42

polypropylene fiber 26.8 0.7 3.1 24.4

vinylon 11.1 1.9 3.9 9.1

carbon fiber 0.3 0.87 0.05 1.12

aramid fiber 0.8 0.45 0.18 1.09

PTT fiber 3 0.2 0 3.2

Total 3985.6 64.2 364.4 3687.4

China is specially developing aramid fiber, carbon fiber, PTT fiber and Spandex.

China’s Petrochemical and Chemical Industry 17

Statistics on China’s synthetic fiber monomer in 2014 (10000 tons)

Description Output Import Export Apparent Consumption

PTA 2732 98 46 2783

ethylene glycol 390 845 0 1235

1,3-propanediol 1 1 0 2

acrylonitrile 132 52 0 184

caprolactam 164 22 0 187

adipic acid 91 2 16 77

1,6-hexanediamine 15 5 0 20

tetrahydrofuran 25 2 1 26

Total 3550 1027 63 4514

PTA in China is basically self-sufficient, but more than half of its main raw material, PX, is imported at

high price. In 2014, China’s apparent consumption of PX was 18.97 million tons; the government is

promoting its production and trying to ensure to the people that the production will not harm the

environment. China’s development of coal-to-aromatic hydrocarbon is just started, it will not yet

influence the demand of PX. Coal-to-ethylene glycol has strong cost competitiveness in China and

great importance for the upgrade of coal chemistry. 1,6-Hexanediamine is another key product to

China, the production of hexanedinitrile (which China fully imports now) by means of 1,3-butadiene is

therefore important. The integration of PDO-PTT production is recommended, as China has had own

technology of PDO and PTT’s cost-saving is progressing.

Synthetic rubber

Statistics on China’s rubber in 2014 (10000 tons)

Description Consumption

natural rubber 455

petroleum-based synthetic rubber 445

non petroleum-based synthetic rubber 71

Total 971

specialty elastomer among the above-mentioned 274

Macromolecular materials

Statistics on China’s macromolecular materials in 2014 (10000 tons)

Description Output Net import Consumption

engineering plastics 184 209 392

high-end polyolefin plastics 324 518 841

polyurethane 711 30 741

fluorosilicon resin 29 3 32

other high-performance resin 41 - 0.6 41

petroleum-based special synthetic rubber 129 117 246

non petroleum-based special synthetic rubber 70 1 71

high-performance fiber 4 1 5

functional membrane materials 22 18 40

Total 1513 896 2409

18

Statistics on China’s engineering plastics in 2014 (10000 tons)

Description Output Import Export Apparent Consumption

polycarbonate 30 148 22.3 155.7

pmma 45 22.5 1.2 66.3

polyamide resin engineering plastics 28.1 41.4 10.2 59.3

polyformaldehyde 32 25.4 4.7 52.6

special polyethylene terephthalate 46.2 18.2 17.5 47

polyphenylene ether 0.9 5 5.9

polyphenylene sulfide 0.6 1.6 2.2

speical engineering plastics 0.8 2.4 0.04 3.2

Total 183.6 264.5 55.94 392.2

Statistics on China’s high-end polyolefin plastics in 2014 (10000 tons)

Description Output Import Export Apparent Consumption

hexene copolymerization pe 280 350 0 630

octene copolymerization pe 5 50 0 55

EVA resin 34 70 4.5 99.5

ultra-high molecular weight polyethylene 3 2.4 0 5.4

mPE 2 43 0 45

mPP 0 6.5 0 6.5

Total 324 521.9 4.5 841.4

China needs to develop high carbon α – olefin copolymerization PE and MAO catalysis polyolefin, and

also hexane-1, octane-1, etc.

Statistics on China’s polyurethane in 2014 (10000 tons)

Description Output

soft-foamed polyurethane 161

hard-foamed polyurethane 210

synthetic leather size 211

stoste of shoe sole 43

elastomer 79

spandex 44

coating 149

adhesive/sealant 54

Total 951

conversion into polyurethane 741

China’s polyurethane products are basically self-sufficient, its raw materials like MDI, TDI and polyether

polyol are basically self-sufficient, but the special isocyanic acid are still mainly imported.

Statistics on China’s Fluorosilicon resin in 2014 (10000 tons)

Description Output Import Export Apparent Consumption

PTFE 8.74 0.63 2.17 7.20

other fluorine resin 2.68 0.47 1.35 1.8

silicone oil 14.0 4.0 2.0 18.0

silicone resin 3.5 0.5 0.0 4.5

Total 28.92 5.6 5.52 31.5

China’s Petrochemical and Chemical Industry 19

As the world’s biggest processer of fluorite and producer of basic fluorine chemicals with more than

half of the global output, China is developing mainstream fluorine chemicals, and still rely on import

for the most advanced fluorine chemicals and their relative products like fluorine-containing ion

exchange membrane. China is strong at the production of silicone monomer and silicone materials

like silicone rubber.

Statistics on China’s rubber materials (10000 tons)

Description Consumption

2014 Estimation on 2020

natural rubber 455 460

petroleum-based special synthetic rubber

polymerized styrene butadiene rubber – sbr (solution sbr)

136 160

(18) (28)

cis-polybutadiene – br (rare earth br)

101 110

(21) (29)

polyisoprene rubber 4 60

others 204 288

non petroleum-based special synthetic rubber

silicone rubber 70 150

others 1 2

Total 971 1220

The key task of China’s synthetic rubber industry is making substitution of natural rubber, 80% of which

needed by the country is imported; the production of polyisoprene rubber and synthetizing 2-methyl-

1, 3-butadiene with 2-methylpropene is therefore important.

Statistics on China’s functional membrane materials in 2014

Usage Products Demand (million m2)

Market scale (100 million CNY)

Self-sufficiency

water treatment MF, UF 55 63.8 63%

RO, NF 30 39.2 14%

separation for pervaporation, organic steam separation 6.54 32%

for industrial gas separation 8.64 13%

hemodialysis 10 16.65 18%

ion exchange for electroosmosis 1 30 75%

for electrolysis (fluorine) 0.18 10 0.30%

for fuel battery (fluorine) 0.7 5%

lithium cell separator, package 410 40.6 35%

Optics PET-based, CA-based, PVA-based 830 64.8 55%

photovoltaic EVA-based, for sealing 510 51 55%

PET-based 260 26 55%

PVF/PVDF-based, to protect backboard 390 39 10%

Others for electric conduction, dielectricity … 23 42%

Total 419.93 42.9%

Statistics on China’s high-performance fiber in 2014 (10000 tons)

Description Output Net Import Consumption

aramid fiber 0.8 0.3 1.1

carbon fiber 0.3 0.8 1.1

PTT 3.0 0.2 3.2

Total 4.1 1.3 5.4

20

The import of carbon fiber is big, mainly because the cost of domestic production is too high, this needs

to be changed. China will focus on the development of high molecular weight carbon fiber, poly-p-

phenylene terephthamide, ultra-high molecular weight polysthylene fiber, polyphenylene sulfide fiber,

PTT fiber, and their raw materials.

Special chemicals

In 2014, China’s gross output value of special chemicals was CNY 2.4 trillion with a volume of 120

million tons, coating was the main product, amounting to CNY 370 billion; the other leading products

are adhesives, concrete admixtures, etc. Generally, 10% of the special chemicals were imported,

specially the electronic chemicals, over 50% of them were imported.

Self-efficiency of China’s special chemicals

Products Self-efficiency

electronic chemicals < 50%

food additives, feedstuff additives, surfactant, adhesives, plastic additives, rubber additives, water treatment chemicals, paper-making chemicals, concrete admixtures, oil field chemicals, leather chemicals, etc

50-95%

coatings, dyes, agricultural chemicals, chemical active pharmaceutical ingredients and intermediates

> 95%

China’s focuses are:

electronic chemicals (the market in China amounted to CNY 170 billion in 2014), fluorine

coatings

chemicals for integrated circuit

resist of 248nm and 193nm

PPT-class high-purity reagent and gas

polyimide and liquid epoxy packaging materials

chemicals for printed-wiring board

special epoxy resin, polyimide resin, BMI modified sym-triazine resin,

thermosetting PPO resin, poly-TA resin

polyimide film, special PET film, electric conduction coatings

dry film anti-corrosion reagent and photosensitivity imaging resistance

welding reagent

chemicals for flat plate display

high-class TFT liquid crystal materials, polarizers for TFT-LCD

colourful PDP light fen for big screens

chemicals for new-energy batteries

the products for high-power lithium cells, but depending on the development

of electric vehicles

PVF backboard film for solar cells

fluorine proton exchange membrane

chemicals for colourful printers

developing agent

safe food and feedstuff additives, with fermentation as the leading processing method

fermented lycopene as food additive

D-ribose as food additive

sugar alcohol as food additive

China’s Petrochemical and Chemical Industry | November, 2015 21

plant extracts, enzyme, micro ecological preparation, organic trace element as

feedstuff additives (China’s output volume of feedstuff additives in 2014 was over 7

million tons, taking the world’s No. 1 position. Some mineral element, vitamin and

amino acid additives have already been over-produced.)

environment-friendly adhesives (as the world’s No. 1 adhesives production and consumption

country, China’s annual output volume of adhesives is around 17.5 million tons)

environment-friendly adhesives, specially urea formaldehyde glue which takes more

than half of all adhesives consumed in China

strategic new-generation adhesives, specially those for the aviation and space

industry, solar cell and wind power generation

optimization of the production structure, to develop silicone adhesives more,

replacing petroleum-based adhesives

high-end surfactant (China is the world No. 2 production and consumption country, after the

U.S.A.)

non-ion surfactant, 20% of which needed in China is imported, specially the

polyoxyethylene-type which China imports 200000 tons a year

special surfactant containing fluorine, silicone or boron (in 2014, China consumed

1200 tons of special surfactant containing fluorine, 80% of which was imported)

environment-friendly plastic additives

poisonless plasticizers, like non-PAEs and long carbon chain PAEs plasticizers

halogen free flame retardants, like inorganic retardants and organic phosphorus

retardants

lead-free thermal stabilizers, like rare earth stabilizers, organic tin stabilizers and

calcium-zinc stabilizers

rubber ingredients (China’s output volume in 2014 was around 5.8 million tons which is around

half of the world’s output)

white carbon black to replace carbon black, to lower the rolling resistance of tyres

green production process, specially of antioxidant 4020

environment-friendly substitution, specially using naphthenes filling oil and plasticizer

DBD

environment-friendly water treatment chemicals (polyaspartic acid …)

flocculant, specially cation poly acrylamide, to replace the inorganic flocculant like poly

aluminium chloride mainly used in China presently

corrosive and scale inhibiter, specially polyaspartic acid, to replace the phosphorus

products mainly used in China presently

chelating agents, specially chitosan

concrete admixtures, the annual output volume of which in China is around 10 million tons

polycarboxylate superplasticizer

coatings

exterior wall coatings like silicone acrylic (the price of organic silicone is cut), fluorine

silicone (good cost performance) and fluorine coatings

coatings for aircrafts, ships and automobiles which are still partly imported

environment-friendly coatings

dye

fluorine dye and its intermediates

new dye for PTT fiber, polylacticacid fiber, soy fiber, bamboo fiber, and new dying

process like digital ink-jet printing, micro-capsule-dye auxiliary-free non-wash dying

pesticide

22

new-generation pesticide, fluorine pesticide

environment-friendly pesticide

intermediates

fluorine liquid crystal intermediates for TFT-LCD

fluorine and heterocycle intermediates

higher efficiency and cleaner process of traditional intermediates

China’s Petrochemical and Chemical Industry | November, 2015 23

5. Chemical Industrial Parks

The parks’ average unit output value is only CNY 1319 / m2, quite some of them are still backward.

Reduction of waste emmission is the core of the improvement needed.

Wastes emission of China’s chemical industry in 2013

Description Volume (10000 tons)

waste water 491000

COD (estimated to be 34 by 2020) 52.98

ammonia nitrogen (estimated to be 5.1 by 2020) 8.98

SO2 (estimated to be 166 by 2020) 217.80

ordinary industrial solid wastes 31836.90

dangerous wastes 871.70

China’s top 20 chemical industrial parks are (no particular order):

http://www.scip.gov.cn

http://www.dayawan.gov.cn

http://www.ncip.cn

http://www.chemzone.net

http://www.pec.qg.gov.cn

http://www.cetda.cn

http://cip.yangzhou.gov.cn

http://www.txedz.cn

http://www.zjgftz.gov.cn

http://www.dypedz.gov.cn

152

95

19

246

80

15

234

China's 841 chemical industrial parks and their main locations (provinces/regions)

Coal-coal chemistry-electricity-building materials-metallurgy-machine

Petrochemistry, in Liaoning, Jiangsu, Fujian, Shandong, Xinjiang

Natural gas chemistry, in Sichuan

Coal chemistry, in Shanxi, Inner Mongolia, Guizhou, Shannxi, Xinjiang, Shandong

Inorganic chemistry, in Hubei, Yunnan, Shannxi, Sichuan, Hunan, Jiangsu for salt, Hubei, Yunnan for phosphorus

Fluorine and silicon chemistry, in Jiangsu, Zhejiang, Jiangxi, Fujian, Inner Mongolia

General chemistry, in Jiangsu, Zhejiang, Guangdong

24

http://www.zhapu.gov.cn

http://www.amip.org.cn

http://www.daxie.gov.cn

http://www.yangpu.gov.cn

http://www.mmht.gov.cn

http://www.qzshy.gov.cn

http://www.wcip.gov.cn

http://www.czcip.gov.cn

http://www.jciz.gov.cn

http://gxq.lcxw.cn

China’s Petrochemical and Chemical Industry | November, 2015 25

6. Additional Information For Flemish exporters of chemicals to enter the Chinese market we recommend to enter the market

via Chinese traders/importers instead of searching for the big end-users. The offices in China of

Flanders Investment & Trade can arrange tailor-made B2B appointments between Flemish exporters

and their potential Chinese partners. Participation in relative exhibitions in China is also good way of

starting business. There may also be good business connection in the Chinese community in Flanders

and Chinese economic delegations to Flanders.

Leading Chinese importers of chemicals:

http://www.sinochem.com

http://www.zhechem.com

http://www.gzchem.com

http://www.dlchem.com

http://www.gtchongkong.com

http://www.highnic.com.cn

http://www.huidachem.com

Leading exhibition in China on chemical industry:

http://www.icif.cn

Other useful links:

http://www.cpcia.org.cn

http://www.chinaembassy-org.be

http://www.ccpit.org (This organization has office in Brussels)

http://www.bcecc.be

http://www.flanders-china.be

http://www.bencham.org

http://www.eusmecentre.org.cn

http://www.china-iprhelpdesk.eu

26

Notes:

This report only covers the Mainland of China, not including the area of Taiwan, Hongkong and Macau.

Sources of this report:

The 13th Five-Year Plan Seminar of Petroleum and Chemical Industry: Planning Guidelines and

Development Strategies, by China National Petroleum and Chemical Planning Institute

http://www.cpcip.org.cn