rongsheng petrochemical logo price

RONGSHENG PETROCHEMICAL CO., LTD. is a China-based company principally engaged in the research, development, manufacture and distribution of chemicals and chemical fibers. The Company’s main products include aromatics, phosphotungstic acid (PTA), polyethylene terephthalate (PET) chips, terylene pre-oriented yarns (POYs), terylene fully drawn yarns (FDYs) and terylene draw textured yarns (DTYs), among others. The Company distributes its products in domestic market and to...More

Rongsheng Petrochemical was founded in 1995 and operates in China. The company engages in the sector "Plastics & Synthetic Rubber in Primary Forms" (ISIC: 2013). This industry belongs to the broader "Chemicals & Related Products" (ISIC: 20) sector. The chemical industry includes large and well-established corporations that manufacture a wide range of products across a variety of markets. Today, the chemical manufacturing sector plays an essential role ─ not only in virtually every economy across the globe, but also within the majority of sectors of those economies. The CEO of the company is Yongqing Li.

Rongsheng Petrochemical Co., Ltd. is a China-based company principally engaged in the research, development, manufacturing and distribution of refining products, petrochemicals and chemical fibers. Rongsheng has an annual production capability of 2 million tons of aromatic hydrocarbon, over 13 million tons of pure terephthalic acid (PTA), 2 million tons of PET, 1 million tons of POY and FDY, 0.45 millon tons of DTY. Rongsheng‘s total capability of PTA ranks the first of the world. Rongsheng persists in “Two-way of Vertical and Horizontal” development strategy and recently developed a green refining-petrochemical integrated project with a total capacity of 40 million tons per annum, via its subsidiary Zhejiang Petroleum and Chemicals Co., Ltd. (ZPC).

On Friday, I examined how China’s paraxylene (PX) net imports could fall to as little 8m tonnes in 2020 from last year’s 16m tonnes. This would have major negative implications for the big exporters to China such as South Korea, Japan and India. I believe this is the beginning of a long-term shift – the subject of today’s post where I consider how China’s imports could, quite literally, collapse over the next ten years. The same may happen in polypropylene, styrene and even polyethylene (PE). The conventional view is that China will remain a very big PE importer for many years to come. I will look at long-term import scenarios for these three other products in later posts. I have long been arguing that the global petrochemicals industry needs to a new business model that is less reliant on Chinese deficits.

Since then many new PX plants have come onstream as China has tried to improve the competitiveness of its polyester value chain. A problem highlighted by local government officials back in 2014 was that many new purified terephthalic acid (PTA) plants being built lacked local feedstock, according to petrochemical industry executives I had spoken to.

Here we are today with a vast amount of Chinese PX steel in the ground and a lot more to come. In 2013, China’s capacity was just 9.4m tonnes/year. This year we expect China’s capacity will reach 18.5m tonnes/year and 39.4m tonnes/year in 2030. We also need to add to the picture the 1.5m tonnes/year PX plant in Brunei that is 70%-owned by a Chinese company – Hengyi Petrochemical.

Under Scenario 2, again included in the above chart, China runs its PX plants at an average operating rate of 88%. Demand growth remains unchanged from our base case. I add to Chinese production 80% of the output from Hengyi Petrochemical’s 1.5m tonnes/year Brunei PX plant.

This seems to make sense given that most of the PX from the facility will be consumed by Chinese producer Yisheng Petrochemical’s three PTA plants in Ningbo, Zhejiang province, which have a combined nameplate capacity of 5.15m tonnes/year. Hengyi owns a 50% stake in Yisheng Petrochemical, while the other 50% is owned by fellow private-sector firm Rongsheng Petrochemical.

These alternative scenarios fit with my long-held view that cost curves will only get you so far in understanding how this the petrochemical industry operates. Social and political dynamics are at least as important, if not more important, than costs per tonne of production.