rongsheng petrochemical linkedin factory

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).

Oil prices tell some of the story. Early last year, as the economy froze up and people stayed home, crude prices crashed, dragging chemical prices down with them. Petrochemical volumes, however, were relatively strong because some products, such as polyethylene, saw an uptick in demand.

For instance, more than a dozen members of the Global Top 50 have major plastics recycling initiatives. A similar number of companies are looking to make ammonia and hydrogen via water electrolysis rather than from natural gas. Still others are overhauling basic petrochemical processes to make them more energy efficient. Dow, Shell, Sabic, and BASF, for example, are developing ethylene crackers that run on renewable electricity.

Despite the year’s volatility, the survey was marked by few changes. Companies heavily laden with petrochemical operations generally saw declines in sales and fell in the ranking. Companies that make industrial gases or agricultural chemicals tended to rise.

Three companies in the Global Top 50 a year ago didn’t make it this year. Ecolab fell off the list because it divested an oil-field chemical business. SK Innovation and PTT Global Chemical were both victims of declines in petrochemical sales.

Now that it is breaking out chemical sales again, Shell rejoins the Global Top 50 this year after a 5-year hiatus. Rongsheng Petrochemical, which makes polyester chemicals, debuts this year. The former DowDuPont agricultural chemical business, Corteva Agriscience, made the cut as well.

Saudi Arabia’s state oil company, Saudi Aramco, completed its purchase of a 70% stake in the petrochemical maker Sabic in June 2020. The purchase was meant to diversify Aramco, which today depends heavily on oil and gas. But soon after the deal closed, the firms announced they were reevaluating the scope of a planned complex that was to convert 400,000 barrels per day of crude oil into 9 million metric tons (t) per year of petrochemicals. Their new, more modest plan is to build an ethylene cracker and derivatives units that will be integrated with existing Aramco refineries. In another instance of Sabic and Aramco working together, the companies shipped 40 t of ammonia to a power plant in Japan last September. The ammonia is considered “blue” because carbon dioxide emitted during its manufacture was captured and used for enhanced oil recovery and methanol production in Saudi Arabia. In another strategic move, Sabic carved out a stand-alone business that includes its polyphenylene oxide, polyetherimide, and compounding units. The company got the businesses with its purchase of GE Plastics in 2007. Sabic had sought to combine them with Clariant’s masterbatch business, but those talks broke down in 2019.

The $9.4 billion petrochemical complex that Formosa Plastics is planning in St. James Parish, Louisiana, is in hot water. It faces fierce opposition both locally from community organizations worried about pollution and nationally from environmental groups that wish to stop the mounting production of plastics. Sharon Lavigne, head of the local group Rise St. James, recently received the prestigious Goldman Environmental Prize for her efforts, a sign that the Formosa project has high-profile opposition. The project also faces practical hurdles. Notably, the US Army Corps of Engineers suspended a permit for the facility in November. Formosa Plastics had better luck in Point Comfort, Texas, where it started up an ethylene cracker and low-density polyethylene unit last year.

Most large chemical companies nowadays are plunging into plastics recycling to counter public backlash, and Lyondell­Basell Industries is at the front of the pack. CEO Bob Patel is one of the founders of the Alliance to End Plastic Waste, formed by industry to address the recycling problem. And Lyondell has its own initiatives. It and the waste management firm Suez bought the plastics recycler Tivaco and are combining it with Quality Circular Polymers, a recycling venture Lyondell and Suez started in 2018. Quality Circular has some high-profile clients. For example, Samsonite is using its resin for a line of sustainable suitcases. Meanwhile, Lyondell continues to grow its core petrochemical business, often on the cheap. In December, the firm bought, for the bargain price of $2 billion, a 50% interest in a new ethylene cracker and two polyethylene plants that the struggling Sasol had built. Similarly, it bought into an ethylene cracker joint venture already under construction in China.

PetroChina will bring a pair of unique petrochemical projects—which cost a total of $2.5 billion—on line later this year. The company is building ethylene crackers in Tarim and Changqing, China, that will use ethane sourced from domestic natural gas fields as their feedstock. These projects wouldn’t be unusual in the US or the Middle East, where oil and natural gas are cheap and plentiful, but ethylene crackers in resource-constrained China are mostly fed with naphtha derived from imported oil. The country also sources petrochemical feedstocks from coal. Both routes to ethylene are relatively expensive and put China at a competitive disadvantage.

Hengli Petrochemical’s growth has been amazing. Last year, the company came out of nowhere to debut at 26 in the Global Top 50. In 2020, and despite the COVID-19 pandemic, the Chinese petrochemical maker’s chemical sales grew by a whopping 46%. Construction at an almost unbelievable pace is responsible for this growth. In 2020 alone, Hengli started two large production lines for purified terephthalic acid (PTA), a polyester raw material, in Dalian, China. The lines, which use technology from Invista, bring Hengli’s PTA capacity to 12 million metric tons (t) per year. In November, Hengli signed a licensing agreement, also with Invista, for two more PTA lines at its site in Huizhou, China. In addition, the company plans to build a plant in Dalian to make a biodegradable plastic from PTA, adipic acid, and 1,4-butanediol. Hengli says the plant will have 450,000 t of annual capacity, a large figure for a biodegradable plastic.

Many people would think of Dow and BASF as the technology giants in industrial chemistry. But Braskem, a Brazilian petrochemical maker, is a technological heavy hitter too. It is partnering with the University of Illinois Chicago on a route to ethylene based on the electrochemical reduction of carbon dioxide from flue gas. At its chlor-alkali complex in Maceió, Brazil, Braskem will host a pilot plant to make ethylene dichloride using a novel process developed by the start-up Chemetry. In this energy-saving process, called eShuttle, chloride ions react with cuprous chloride (CuCl) to form cupric chloride (CuCl2), which reacts with ethylene to form the polyvinyl chloride raw material. In Pittsburgh, Braskem recently completed a $10 million expansion of its technology and innovation center to allow work on recycling, 3D printing, and catalysis.

Recent years have seen Chinese petrochemical producers, often involved in the polyester supply chain, join the Global Top 50. Hengli Petrochemical is one of those firms. And now Rongsheng Petrochemical is another. The company is one of the largest producers of purified terephthalic acid in the world, with 13 million metric tons of capacity at plants in Dalian, Ningbo, and Hainan, China. It also makes polyester resin and fiber. It is an investor in Zhejiang Petrochemical, a large oil refinery and petrochemical complex that is currently starting up.

Sustainability continues to be a focus for the Austrian petrochemical maker. In June, the company signed an agreement to buy oil from Renasci Oostende Recycling, which uses a thermal process to break down postconsumer plastic. Borealis will turn this feedstock into plastics again at its complex in Porvoo, Finland. Borealis also started up a demonstration unit at its polyethylene plant in Antwerp, Belgium, to test a heat-recovery technology developed by the start-up Qpinch. The technology is modeled on the adenosine triphosphate–adenosine diphosphate cycle in biology. Separately, Borealis put its fertilizer business up for sale in February.

Sasol ended a saga in November when it started up a low-density polyethylene plant in Lake Charles, Louisiana. The unit was the last of the plants the South African company built as part of a $12.8 billion petrochemical complex. The project went $4 billion over budget, leading to the ouster of its co-CEOs. To strengthen its balance sheet, Sasol aims to divest $6 billion in assets. To that end, the company formed a joint venture with LyondellBasell Industries to run the ethylene cracker and two polyethylene plants it built in Lake Charles, essentially selling half these operations for $2 billion. Sasol is keeping alcohols, ethylene oxide and ethylene glycol, and ethoxylation plants at the site. Separately, Sasol sold its 50% interest in the Gemini HDPE high-density polyethylene joint venture with Ineos for $400 million.

Saudi Aramco today signed three Memoranda of Understanding (MoUs) aimed at expanding its downstream presence in the Zhejiang province, one of the most developed regions in China. The company aims to acquire a 9% stake in Zhejiang Petrochemical’s 800,000 barrels per day integrated refinery and petrochemical complex, located in the city of Zhoushan.

The first agreement was signed with the Zhoushan government to acquire its 9% stake in the project. The second agreement was signed with Rongsheng Petrochemical, Juhua Group, and Tongkun Group, who are the other shareholders of Zhejiang Petrochemical. Saudi Aramco’s involvement in the project will come with a long-term crude supply agreement and the ability to utilize Zhejiang Petrochemical’s large crude oil storage facility to serve its customers in the Asian region.

An integral part of the project includes a third agreement with Zhejiang Energy to invest in a retail fuel network. The companies plan to build a large scale retail network over the course of the next five years in the Zhejiang province. The retail business will be integrated with the Zhejiang Petrochemical complex as an outlet for the refined products produced.

Hengli Petrochemical manufactures and sells large and heavy rubber/plastics equipment. It offers rubber and plastics mixers, rubber and plastics calendaring products, one step mixing technology products, various series two roll mills, single/twin-screw plastics extruder products, radial tire inner liner production products, tread co-extrusion products, pin cold feeding extruders, one step type steel wire radial tire building machines, conveying belt press machines, single layer/multi-layer co-extrusion blown film products, plastics twin-screw compounding and large plastics compounding extrusion pelletizing products, new material equipment for battery film and carbon fiber, etc.

Hengli Petrochemical sells its products in China, Europe, the United States, Australia, Africa, etc. It began operation in 2002, with its headquarters in Dalian in China as a subsidiary of Hengli Group..

Rongsheng Petrochemical produces, markets, and sells petrochemicals, chemical fibers, and other related products in China and internationally. It offers synthetic fibers and films, including fiber and film grade polyester chips, bottle grade polyester chips, polyester pre-oriented yarns, draw textured yarns, fully drawn yarns, and PET films; synthetic raw materials, such as purified terephthalic acids, ethylene oxides, triethylene glycol, diethylene glycol, ethylene glycol, and P-xylene; and synthetic resins comprising ethylene-vinyl acetate copolymers, high density polyethylene, low-density polyethylene, and polypropylene.

Rongsheng Petrochemical also provides olefins consisting of butene-1, hexene-1, butadiene, propylene, and ethylene; aromatics and phenols, including cumene, acetone, phenol, styrene, ethylbenzene, xylene, mixed aromatics, methylbenzene, and purified petroleum benzine; and acrylonitrile and special chemical products, such as dimethyl carbonate, methyl methacrylate, polycarbonate, bisphenol A, acetonitrile, and acrylonitrile. Moreover, it offers intermediate and chemical raw materials comprising iso-butane, n-butane, petroleum cokes, liquid argons, liquid ammonia, methanol, liquid petroleum gas, isooctane, methyl tert-butyl ether, industrial hexane, pentane foamer, industrial aromatic hydrocarbons, high-flash aromatic naphthas, ethylene bottom oils, splitting decomposition C9 and C5, and sulphur; and oil products, such as jet fuels, diesel, and gasoline.

Rongsheng Chemical Fiber Group that began operation in 1995 became Rongsheng Petrochemical in September 2007. It has its headquarters in Hangzhou in China as a subsidiary of Zhejiang Rongsheng Holding Group..

The startup took only about three days to complete. The liquids ethylene cracker is part of ZPC’s grassroots integrated refining and petrochemical complex which broke ground in 2016.

(1) ZPC: Zhejiang Petroleum & Chemical Co., Ltd, established in Zhoushan, Zhejiang on June 18, 2015, is a mixed-ownership enterprise jointly formed by the private enterprise Rongsheng Petrochemical Co., Ltd.（holding 51% of shares）， provincial state-owned enterprise Zhejiang Juhua Investment Co., Ltd.（holding 20% of shares）, the private enterprises Zhejiang Tongkun Investment Co., Ltd.（holding 20% of shares） and Zhoushan Marine Comprehensive Development and Investment Co., Ltd.(holding 9% of shares), which will be the first kind of mixing economy enterprise in China in the Refinery and Petrochemical Industry. ZPC’s first phase project includes 20 million tons per year refinery and 1400 KTA Ethylene Complex.

This section contains information and comments on China´s chemical industry, as posted from January 2020 onwards to December2021. Entries are not revised later. For older entries, see separate sections. For daily updates, please join the LinkedIn group "News and Trends in China´s Chemical Industry".

Comment MCC: The catalog includes 34 water-saving technologies in the petrochemical and chemical industry which range from very general ("chemical waste water recycling") to very specific ("a dry trapping device for isophthalonitrile")

Dec 06, 2021:During the period of the 14th Five-Year Plan, Jiangxi province has specific targets for the chemical industry, including 150 billion yuan for the petrochemical industry, 100 billion yuan for the fine chemical industry, 80 billion yuan for the new chemical materials industry, and 80 billion yuan for the chlor-alkali chemical industry.

Nov 29, 2021: The China Petroleum and Chemical Industry Federation is working on the establishment of a carbon accounting system for the petrochemical industry and related standards for carbon neutrality. The likely threshold for inclusion is annual carbon dioxide emissions of more than 26,000 tons in any year during 2013-2018. The Petrochemical Federation is conducting pilot projects in some sub-sectors such as oil refining, chlor-alkali, and calcium carbide.

Nov 25, 2021: Sinopec"s crude oil steam cracking to ethylene industrial test jointly developed by Beijing Research Institute of Chemical Industry, Engineering Construction Co., Ltd. and Tianjin Petrochemical Company showed a single-pass chemical yield of 48.24% based on crude oil.

Nov 11, 2021:While in 2019 about 60% of all petrochemical products in the Chinese market faced excess supply or severe excess supply, this share is expected to rise to 75% by 2025.

Oct 01, 2021:Shenghong Group"s Serbon Petrochemical and Iceland Carbon Recycling Company signed a contract in Beijing for a carbon dioxide capture and utilization project.

Sep 14, 2021:During the period of the 14th Five-Year Plan, Shandong province aims to reach an output value of the chemical industry of 2.65 trillion yuan, higher than Guangdong"s petrochemical industry scale of over 2 trillion yuan and Zhejiang"s 1.8 trillion yuan expectation.

Sep 13, 2021: Several private domestic companies including Zhejiang Hongji Petrochemical and Baofeng Energy have entered the field of metallocene polyolefins.

Comment MCC:The list reflects several trends - the growing relative importance of the Chinese companies (all 6 Chinese top 50 companies rose in the rankings), the growing importance of some of the independent players (e.g., Hengli rose from rank 27 to rank 14) and the strong position of Sinopec (ranked 2) and ChemChina (ranked 7, from8). It also raises some questions with regard to its accuracy. On rank 44, there is a new entrant, Shanghai Petrochemical. It is somewhat puzzling that this should be a separate entrant as it is a Shanghai-based petrochemical subsidiary of Sinopec and thus presumably already included with its sales in the Sinopec entry.

Sep 01, 2021:Saudi Basic Industries, a world-renowned diversified chemical company, and Fujian Petrochemical Group will establish a JV to build and operate a 40 bn Yuan petrochemical complex at the Gulei Petrochemical Base in Fujian Province, China. Planned output includes 1.5 million tons of ethylene as well as downstream production of PE, PP, PC and EG.

Aug 26, 2021:The Ministry of Industry and Information Technology announced the first batch of technologies and product catalogs encouraged to be promoted and applied by the petrochemical and chemical industries.

Aug 01, 2021: A recent report comparing the petrochemical industry in China and the US sees advantages for China related to low project investment costs, the concentration of downstream markets, and reduced operating costs due to large-scale optimization capabilities.

Comment MCC:The authors of the report believe that these advantages can compensate for the lack of local raw materials, and are particularly optimistic about the large integrated private companies such as Hengyi Petrochemical, Hengli Petrochemical, Rongsheng Petrochemical, Dongfang Shenghong.

Jul 09, 2021: Sinopec launched the construction of China"s first megaton-level CCUS (Carbon Dioxide Capture, Utilization and Storage) project, the Qilu Petrochemical-Shengli Oilfield CCUS project .

Jul 06, 2021: Kanghui Dalian New Material Technology Co., Ltd., a subsidiary of Hengli Petrochemical, plans to invest 1.8 billion yuan to build a 450,000-ton PBS biodegradable plastic project

Comment MCC: This is in line with government targets to finish relocalization of even the biggest chemical plants by 2025. It also offers PetroChina the opportunity to shift Dalian Petrochemical"s focus from being a fuel-based to a chemical-based refinery. This step will assure that the refinery will remain relevant even if the demand for fuel decreases.

Jun 13, 2021:Wanhua Chemical and Hengyi Group will cooperate in all aspects of petrochemical downstream industrial chain projects, research, and development, trade, overseas project operations, etc. Both parties will establish a JV in Brunei as the main investor to carry out cooperation business.

Jun 05, 2021: Several cities and provinces have set requirements for the operation time of coatings, chemical, petrochemical, and other production enterprises and the spraying process to reduce VOC emissions particularly during the hottest time of the day.

Comment MCC:As a consequence of government measures to promote biodegradable plastics, major petrochemical players such as Hengli now are entering the market despite these materials so far accounting for less than 1% of plastics consumption

May 13, 2021: Zhejiang province has issued the 14th Five-Year Plan for the petrochemical industry, aiming at increasing refining capacity of more than 100 million t/a, olefin capacity of 15 million t/a and aromatics capacity of 14 million t/a by 2025

May 08, 2021:The Oriental Fortune Research Center released the 2020 China Top 500 List of Listed Companies in Revenue. 23 chemical-related production companies are on the list: Sinopec, PetroChina, China Shenhua, Yanzhou Coal, CNOOC, Hengli Petrochemical, China Coal Energy, Rongsheng Petrochemical, Hengyi Petrochemical, Zhongtai Chemicals, Shanghai Petrochemical, Wanhua Chemical, Sinochem International, Yuntianhua, Xinfengming, Kingfa Technology, Huajin Co., Ltd., Donghua Energy, Huayi Group, Qixiang Tengda, Oriental Shenghong, Tianyuan Co., Ltd., Sinochem Fertilizer . Among them, Sinopec and PetroChina are ranked first and second, while Hengli Petrochemical, Rongsheng Petrochemical, and Kingfa Technology have risen by more than 20 places

Comment MCC: As the long-term future of the petrochemical industry will probably depend more on producing chemicals than fuel, Sinopec already adapts its portfolio accordingly in order to stay relevant. Of course, one could also call this "mission creep".

Apr 26, 2021:Many chemical plants of LG Chem, Yanshan Petrochemical, CNOOC, Fushun Petrochemical, Sinopec Mitsubishi and others are scheduled to be shut down for maintenance or under maintenance in May. May is historically the month with the highest overhaul intensity.

Apr 22, 2021: 6 Chinese companies (12%) are among the top 50 chemical companies listed by C&EN, namely Sinopec, Formosa Plastics, PetroChina, Hengli Petrochemical, Syngenta and Wanhua Chemical.

Comment MCC: Given that Sinopec"s EBIT in chemicals shrank by about 47% in 2020, the increased investment indicates a strong long-term focus on chemicals. Presumably, partly this is due to the partial shift of Sinopec"s focus on the hydrogen economy, which will have a much larger impact on fuel demand than on demand for petrochemicals.

Mar 27, 2021:SK Global Chemical has partnered with Chinese chemicals firm Zhejiang Satellite Petrochemical to build an eco-friendly packaging plant in Lianyungang, China (Chemical Technology). The 60/40 JV will produce ethylene acrylic acid (EAA), an adhesive copolymer widely used in packaging materials. The planned capacity is 40 kta.

Mar 24, 2021: In a recent speech, Fu Xiangsheng of the CPCIF discusses the challenges of the chemical industry to meet the "2030 peak carbon" and "2060 carbon neutrality" targets, pointing out that the petrochemical industry accounts for about 10% of all of China"s emissions.

Comment MCC:Interestingly, he sees the relatively low targeted GDP growth figure of 6% as an indicator of a shift from volume to quality. He also highlights the opportunities to innovate in the petrochemical industry, e.g., new technologies for energy conservation and emission reduction, new green technology, and the production of chemicals using carbon dioxide as raw materials.

Mar 02, 2021:Xu Wenhua, a representative of the Municipal People"s Congress, deputy secretary of the Party Working Committee of Ningbo Petrochemical Development Zone, promotes establishing a China Chemicals Futures Exchange in Ningbo.

Feb 17, 2021: Brand Finance, a brand valuation company, valued Rongsheng Chemical at number 11 of its most recent ranking of global chemical companies. The next Chinese entry is Xinjiang Zhongtai.

Comment MCC: According to the company, Rongsheng`s brand value is about 1.6 bn USD compared to leading BASF`s 7.3 bn USD. To me, the exercise of determining these values seems relatively murky, and I doubt anybody would pay that much for Rongsheng as a stand-alone brand name (BASF might be a different matter). Still, the valuation company achieves its goal of getting some publicity, such as getting mentioned in this post.

Comment MCC:This indicates a shift of profitability towards the more specialized, more downstream parts of the petrochemical value chain. Even within the chemical segment, this shift is visible as the annual operating income and profit of basic chemical products decreased (-5.2%, -2.6%) while that of pesticides (+6.1%, +0.5%) and specialty chemicals (+1.6%, +13.4%) increased.

Feb 07, 2021: Ongoing 2020 performance forecasts by domestic listed chemical companies show substantial increases in profit margin. For example, the profit of Rongsheng Petrochemical is expected to increase by about 230% yoy.

Jan 19, 2021:Hunan Province issued a "Five-Year Action Plan for the Industrial Chain of New Chemical Materials in Hunan Province (2021-2025)", focusing on new petrochemical synthetic chemical materials, fluorine chemical materials, functional coatings, new chemical materials, and rail transit applications. The target is to achieve a total output value of 120 billion yuan, with 480 new chemical material companies that have passed the certification, 3 companies with more than 10 billion yuan, and 20 companies with more than 1 billion yuan.

Comment MCC: While the rankings of the three major petrochemical SOEs are somewhat lower than before, several others have gone up the ranks, including Tianci Materials, Dongfang Shenghong, Xinyubang and Sankeshu. This indicates that the market views companies active in new materials and related areas very favorably.

Jan 12, 2021: According to a ranking of the world`s top brands, there are 10 oil and petrochemical brands among the top 500. Four of these are Chinese: Petrochina, Sinopec, CNOOC, Sinochem

Comment MCC: The activities of the major state-run petrochemicals will have a significant impact on China`s performance regarding carbon dioxide emissions, making this an encouraging development.

Dec 05, 2020:According to data from the National Enterprise Bankruptcy and Reorganization Case Information Network, in recent years there have been more than 4,000 bankruptcy cases in the Chinese chemical industry, including segments such as coatings, petrochemicals, coal chemicals, biochemicals, dyes and other fields.

Nov 28, 2020: Among the top 100 companies in the Yangtze River Delta, 11 are petrochemical and chemical companies, including Hengli Group ranked fourth

Nov 17, 2020: Shandong Provincial Development and Reform Commission published a list of 9 leading high-end chemical companies: Shandong Huifeng Petrochemical Group Co., Ltd., Shandong Shouguang Luqing Petrochemical Co., Ltd., Luxi Chemical Group Co., Ltd., Shandong Rongxin Group Co., Ltd., Shandong Shangshun Chemical Co., Ltd., Shandong Linglong tire Co., Ltd., Yankuang Lunan Chemical Co., foreshore Group Co., Ltd., Shandong Taihe water treatment Technology Co., Ltd .

Comment MCC:This is part of a policy of the provincial government to replace small independent refiners - some of which may have to close depending on their size - with large, integrated petrochemical complexes.

Comment MCC: Probably this number will be reduced in the future, following the lead of Shandong province, where only 85 of the original 199 chemical parks were identified as worth keeping. On the other hand, the current rate of petrochemical enterprises in chemical parks is only about 50%, meaning there will be much more demand for locations in parks if the relocation policy is to be implemented in full.

Oct 30, 2020: In the first half of 2020, the petrochemical industry"s operating income fell by 11.9%, total profits fell by 58.8%, and total imports and exports fell by 14.8%, a consequence of Covid-19.

Oct 29, 2020: Chen Jianhua and Fan Hongwei, the owners of Hengli Petrochemical, are the wealthiest Chinese with activities in the chemical segment. They rank no. 20 in the list of wealthiest Chinese people according to the "Hurun Rich List", with a wealth of 135 billion RMB.

Oct 25, 2020: In the first eight months of 2020, the number of enterprises above designated size in the petrochemical industry has decreased by nearly 500 while last year, the number of enterprises above designated size in the petrochemical industry dropped by 1,500.

Comment MCC:The list clearly shows that rich provinces coastal provinces such as Shanghai, Jiangsu and Zhejiang will primarily focus on higher-end, R&D-oriented specialties (with some exceptions for coastal petrochemicals) while the bulk of basic chemical production is to be done in inland provinces such as Anhui and in the Western provinces.

Oct 12, 2020: Hailun Petrochemical, a subsidiary of Sanfangxiang, plans to expand its current production capacity of 1.8 million tons of PTA to 5 million tons

Oct 03, 2020: According to the Ningbo Municipal Bureau of Economics and Information Technology during the "14th Five-Year Plan" period, Ningbo will invest nearly 400 billion yuan to build a batch of major new chemical materials projects and become a world-class green petrochemical industry cluster.

Comment MCC:The goal is to triple the current petrochemical output of the city. Ningbo is well placed, as environmental policy favors coastal sites over those on the Yangtze river. However, from the information available so far, it is hard to see what is particularly green about this plan.

Sep 29, 2020: Hengyi Petrochemical is planning to spend USD 13.65bn to build the second phase of a refinery and petrochemical complex in Brunei, adding (among others) 2.5 million t/a of PTA capacity.

Sep 28, 2020: Currently about 20 polycarbonate projects are in progress in China with a combined production capacity about 3.15 million tons per year, including Zhejiang Petrochemical and Pingmei Shenma, Cangzhou Dahua, Hainan Huasheng, Zhongsha Petrochemical, and Shell.

Comment MCC:This is increase supply security for these petrochemicals and includes activities in Russia (PE, PP, NBR), Saudi Arabia (YASREF refinery project), the Netherlands (VESTA liquid bulk storage project) and Singapore (lubricants plant and supporting jetty project)

Sep 13, 2020:In the first quarter of 2020, three private Chinese refining companies substantially increased their yoy net profits: Hengli Petrochemical (+324%), Rongsheng Petrochemical (+103%) , Hengyi Petrochemical (+83%).

Sep 09, 2020: Fu Xiangsheng of the China Information Weekly describes four main points of the upcoming 14th Five-Year Plan for the chemical industry: strengthening the overall power of the petrochemical industry, pursuing innovation and environmental improvement, focus on high-quality development, and dealing with both domestic and international markets (which includes the aspect of local self-sufficiency).

Aug 30, 2020: The trial against Baota Petrochemical Group Co., Ltd. and Sun Hengchao has started. Both are accused of bill fraud while some other people involved in the case are accused of bribery or accepting bribes.

Comment MCC:Sun Hengchao, the chairman of the privately owned Baota Petrochemical Group, had already been arrested in Nov 2018. Apparently, since 2013, Baota Petrochemical Group had experienced large-scale losses, which the chairman tried to cover up by establishing a finance company. As I am not an accountant, I will leave it at this rather superficial level.

Aug 27, 2020:Saudi Aramco has suspended plans to participate in a JV to build a $10-billion refining and petrochemicals complex at Liaoning, China, as the company cuts spending in response to continued low oil prices (Bloomberg)

Aug 13, 2020:BASF acquired alkoxylates production assets from Sinopec Shanghai Petrochemical Company (SPC). This includes SPC"s land, buildings and assets that are located adjacent to its facility in Jinshan, China.

Aug 11, 2020:After a hazardous chemical leakage event at Changlian Petrochemical in Jan 2020, the GM was barred from leading a production unit for 5 years.

Aug 11, 2020:Wanhua Petrochemical, a subsidiary of Wanhua Chemical, and ADNOC L&S, a shipping logistics company under the Abu Dhabi National Oil Company, announced the establishment of a strategic joint venture company AW Shipping

Aug 07, 2020: The Shandong Provincial Department of Industry and Information Technology announced the " Top 100 Shandong Private Enterprises in 2020 ". 32 were petrochemical and pharmaceutical companies.

Jul 29, 2020:The C&E 2019 list of the top 50 global chemical companies has four Chinese entries: Sinopec (2, same as in 2018), PetroChina (13, from 12 in 2018), Hengli Petrochemical (26, not listed in 2018) and Wanhua (32, from 40).

This low number of major domestic chemical companies indicates the relative fragmentation and lack of global reach of China`s chemical segment. It also means that the Chinese market is the one that will be the most fought over by the global players as it is fragmented and still shows strong growth compared to Western markets. While part of this growth is being captured by Chinese players such as Wanhua, which has become the world`s biggest MDI producer, and Hengli Petrochemical, which at rank 26 now ranks one higher than the chemical sales of a company as established and traditional as Bayer at 27, there is still substantial room for foreign players to increase their sales. This is particularly true in specialty chemicals, an area which is not the strength of any of the four Chinese players, though Wanhua is increasingly directing new investment in this direction.

Comment MCC: In this list, the chemical segment lags behind other segments by number of entrants, e.g. finance (76 companies), medical and biological (61 companies), information technology (59 companies), and electronics (46 companies). And excluding petrochemical companies, the biggest chemical player, Wanhua, only comes in at number 104. This indicates the relatively high degree of fragmentation and low relative market value of the chemical segment in China.

May 24, 2020: Shell and CNOOC will expand their petrochemical joint venture in Huizhou, China. The project will include a 1.5 million-metric-ton-per-year ethylene cracker, as well as styrene, propylene oxide, polyols, ethylene glycol, polyethylene, and polypropylene units (C&EN).

May 22, 2020: In 2019, among 325 major listed Chinese basic chemicals companies, Wanhua had the highest profit, reaching 10.1 billion RMB followed by Hengli Petrochemical with 10.0 billion RMB.

May 10, 2020:Among the listed companies in the Chinese basic chemical industry in 2019, Hengli Petrochemical ranked first in operating revenue of 101 billion yuan; Rongsheng Petrochemical ranked second with operating revenue of 83 billion yuan; and Hengyi Petrochemical ranked third in operating revenue with 80 billion yuan.

Comment MCC: That puts these companies solidly into the global top 100, even though none of them was included in the 2019 ICIS list of top 100 chemical companies. For example, Hengli Petrochemical would roughly rank no. 25, slightly below Shin-Etsu but above illustrious companies such as DSM and AkzoNobel.

margin of the petrochemical sector (which includes PX production) was as high as 22%, while that of other sectors was only 5%. Likely, this will strengthen the already strong believe among China`s chemical companies that upstream integration is almost always beneficial.

Comment MCC: Not surprisingly, Covid-19 had a substantial negative effect both on average MDI prices and on volumes sold. The much bigger impact on profits than on revenue is partly due to the high fixed costs of petrochemical business.

Apr 24, 2020: On April 22, the ExxonMobil Huizhou Ethylene Project with a total investment of 10 billion US dollars started construction in the Daya Bay Petrochemical Zone in Huizhou, Guangdong. The wholly foreign-owned foreign investment has a planned capacity of 1200 kt/a metallocene PE, 470 kt/a LDPE and 860 kt/a PP.

Mar 06, 2020: Wanhua and state-owned Fujian Petrochemical Group are setting up an 80-20 joint venture diisocyanate business. The JV will build a planned 400 kt/a MDI plant in Fuzhou.

Comment MCC: However, he also mentions some of the challenges to the industry, namely the competition from petrochemical products due to rising local refining capacity and low oil prices, and environmental issues. The latter seems particularly relevant as China aims to increase the sustainability of its economy. For example, coal-to-oil projects emit about 7-8 times more carbon dioxide than oil refining projects. Any expansion of coal chemical projects thus contradicts China`s efforts to protect the environment.

Comment MCC:From Jan to Oct 2019, sales of the petrochemical industry in Hubei province increased by 3.2% while profits increased by 25.3% year-on-year, indicating that the companies not closed down seem to profit from the government measures. On the other hand, 28% of the companies affected were closed down. Also, the funds budget looks relatively small, with only about 3 million RMB per company, which may be sufficient for some smaller upgrades but certainly not for a full-scale relocation.

Comment MCC: While this is somewhat below china GDP growth (6.2% in 2019, 5.7% forecast for 2020), it is still much higher than in the other big chemical markets. The relative increase of chemical growth compared to GDP growth (2020 vs. 2019) primarily reflects the localization of petrochemical production in China, a strategic objective of China`s government.

On August 17, the largest petrochemical project of the cross-strait joint venture, the ethylene unit cracking furnace of the Gulei Refining and Chemical Integration Project in Zhangzhou, Fujian, was put into use. It took 31 hours to produce qualified ethylene. The time arrived, setting a new record for Sinopec"s large-scale ethylene transfer in recent years.

The Gulei Refining and Chemical Integration Project is a leading project in the Zhangzhou Gulei Petrochemical Industrial Park. It was approved by the Development and Reform Commission of Fujian Province in January 2016 and is jointly constructed by Fujian Refining and Chemical Co., Ltd. and Xuteng Investment Co., Ltd. each with a 50% stake.

The total investment of the project is about 32.5 billion yuan. It is located in Quanhui Petrochemical Industrial Park, Quanzhou City, Fujian Province. Relying on the 12 million tons/year oil refining project that has been completed and put into operation, the crude oil processing capacity will reach 15 million tons/year refining through reconstruction and expansion. The 1 million tons/year ethylene project covers an area of approximately 6,541 mu.

The construction content of the project includes the main project and supporting construction of the wharf project, storage and transportation project, public auxiliary project, and environmental protection project. The main project is located in the Lianyungang Petrochemical Industrial Base, Xuwei New District, Lianyungang City. It mainly includes 16 million tons/year atmospheric and vacuum distillation, 4 million tons/young hydrocarbon recovery, 1.8 million tons/year kerosene hydrogenation, 2 million tons/year delayed coking, Combined heavy oil hydrogenation (3.5 million tons/year + 3.6 million tons/year hydrocracking + 3.3 million tons/year residual oil hydrogenation), 3 million tons/year gasoline and diesel hydrogenation, 600,000 tons/year sulfur recovery, 2 ×3.2 million tons/year continuous reforming, 2.8 million tons/year p-xylene, 1.1 million tons/year ethylene, 260,000 tons/year acrylonitrile, 90,000 tons/year methyl methacrylate (MMA), 300,000 tons/year 27 sets of ethylene-vinyl acetate copolymer (EVA), integrated coal gasification combined cycle power generation (IGCC) and other 27 units per year.

In June 2021, Shandong Yulong Petrochemical Co., Ltd. Yulong Island Refining and Chemical Integration Project (Phase I) PSA unit started. The device adopts new technology to maximize the extraction of hydrogen from traditional fossil energy and hydrogen-rich gas, increase the recovery rate, reduce the consumption of raw gas, and reduce energy consumption and carbon dioxide emissions.

The second phase of the 40 million tons/year refining and chemical integration project of Zhejiang Petrochemical Co., Ltd. is located in Yushan Island, Daishan County, Zhoushan City, Zhejiang Province. The total investment is 82.93 billion yuan. It is planned to invest 20 billion yuan in 2020 and the total land area is 500,000 square meters. The construction period is 2020-2022.

On January 22, 2021, in order to promote the construction of the second phase of the 40 million tons/year refining and chemical integration project of Zhejiang Petrochemical Co., Ltd., a holding subsidiary of Rongsheng Petrochemical Co., Ltd., Zhejiang Petrochemical as a borrower and 10 banks The syndicate signed the "Syndicated Loan Contract", and the project syndicate agreed to provide the borrower with a medium- and long-term loan line equivalent to RMB 52.7 billion or equivalent foreign exchange.

PetroChina Guangxi Petrochemical Company’s refining and chemical integration transformation and upgrading project is located in the northern part of Qinzhou Port Industrial Zone, Qinzhou Port Economic and Technological Development Zone. The total investment is about 30 billion yuan, and the land area is about 363 hectares, including 66 hectares of the company’s existing land (existing demolition Project quantity), 297 hectares of land need to be newly acquired, and it is planned to be completed and put into production 36 months after approval.

On April 12, 2021, the China (Guangxi) Pilot Free Trade Zone Qinzhou Port area issued an announcement for consultation on the social stability risk analysis of the PetroChina Guangxi Petrochemical Company"s refining and chemical integration transformation and upgrading project.

CNPC Guangdong Petrochemical"s refining and chemical integration project includes 20 million tons/year of oil refining (including 2.6 million tons/year of aromatics) and 1.2 million tons/year of ethylene. It is planned to be fully completed and put into operation in 2022. After it is completed and put into production, it will greatly reduce the dependence of China"s aromatic demand on foreign imports and enhance the ability of self-protection of raw materials.

The refinery area is located in the area west of the Longjiang estuary in the Dananhai Petrochemical Industrial Zone, Jieyang, Guangdong; the crude oil terminal reservoir is located in the Shibeishan area in the southeast of Huilai County; the crude oil terminal is located in the sea near the Shibeishan lighthouse in Jinghai Town; the refined oil terminal is located in the Longjiang River, the Dananhai The waters west of the estuary.

In April 2021, the Guangdong Petrochemical Refining and Chemical Integration Project has completed most of the civil foundation construction and entered the stage of full deployment of the installation project.