2026 China PP Capacity to Keep Expanding
In the next five years, the PP industry will remain in a capacity expansion cycle, with capacity continuing to grow at a relatively fast pace. According to a survey by SCI on newly planned units over the next five years, it is estimated that China will add 23.145 million mt/a of new PP capacity, with an average annual growth rate of 8.19%, which is 3.02 percentage points lower than in the previous five years. Among this, it is projected that China will add 5.65 million mt/a of new PP capacity in 2026, bringing the total domestic capacity to over 50 million mt/a. This will significantly increase the supply pressure in China.
From 2026 to 2030, China’s PP capacity will continue to grow, leading to more abundant domestic supply. This will further drive an increase in the PP self-sufficiency rate and strengthen the substitution of imported supplies. According to SCI, the planned new capacity for 2026 is 5.65 million mt/a, slightly higher than the expansion in 2025. Meanwhile, the total capacity is expected to reach 53.875 million mt/a, with a projected growth rate of 11.72%. However, considering the actual progress of new plant commissioning, some capacity additions are expected to be delayed. Additionally, as some projects are still in the planning or approval phases, the commissioning schedule may face uncertainties, with possible delays or adjustments.
In terms of feedstock sources, the newly added capacity in 2026 will continue to be dominated by facilities using oil and propane as feedstocks. Meanwhile, newly added coal-based PP capacity will also witness a new wave of concentrated commissioning, further increasing its market share. From the perspective of enterprise nature, although there are capacity expansion plans at CNPC and Sinopec, their share remains relatively small. Local refineries and light hydrocarbon enterprises will continue to be the main drivers of new capacity, intensifying competition among market players. Regarding the regional distribution of new capacity, it remains concentrated in North China, East China and South China. However, new capacity in Northwest China shows a noticeable increasing trend compared to previous years, further intensifying competition within the region.
Looking at the commissioning time of new capacity in 2026, the first half of the year will see limited additions, with capacity release concentrated in the second half of the year. Coupled with the anticipated spring maintenance season in H1 2026, supply-side support for the market during this period is expected to be relatively strong. However, the significant volume of new capacity coming online in H2 2026 will bring considerable supply pressure. Some of the new capacity is scheduled for commissioning near the end of the year, which will have a limited impact on the overall supply within the year.
Overall, the continued expansion of PP capacity and the significant increase in supply pressure from the 2026 capacity additions will further intensify market competition while substantially boosting supply-side growth. This will also be a key factor preventing PP prices from breaking away from lower levels in 2026.
All information provided by SCI is for reference only, which shall not be reproduced without permission.
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