2020 China C3 Industry Overview and 2021 Forecast (Part one)
Lead: During the 13th Five-Year Plan period, China’s petrochemical industry developed rapidly and formed a diversified market development pattern integrating state-owned enterprises, local refineries, joint ventures and private refining-chemical integration. In 2020, China’s propylene continued to rank first in capacity and consumption in the world. As for the C3 industry chain, the crude oil price even dropped to a negative value in 2020, and the PP powder price rose by 40% in a single day. Besides, the propylene value chain structure changed, and the balance between supply and demand of the propylene market also changed significantly. Moreover, the spread of global public health events aggravated the uncertainty of the industry pattern development. In the future, as China’s olefin industry gradually develops, more capacity will be put into production. 2021 is the first year of the 14th Five-Year Plan and a crucial year for China to further transform into a petrochemical power. Therefore, the development of the C3 industry chain will also face major changes in the future.
China’s propylene capacity and consumption continued to rank first in the world in 2020.
Propylene is the basic feedstock of the three major synthetic materials (plastics, synthetic fibers and synthetic rubber). During the 13th Five-Year Plan period, the petrochemical industry started the industrial upgrading with refining-chemical integration, so China’s C3 industry developed rapidly. Globally, in 2020, China’s propylene capacity and consumption volume were will continue to rank first in global production and consumption with up to 44.77 million tons (31% of global production capacity) and 39.8 million tons. From 2016 to 2020, China's propylene production capacity continued to expand, with a growth of 33.5% in five years. Propylene production in 2020 will be 36.1 million tons, up 9% year-on-year, and total demand will be around 39.8 million tons, up 6.7% year-on-year. Because the growth rate of production capacity is significantly faster than the growth rate of production, and the growth rate of demand is even worse, the average annual operating load of propylene in 2020 will drop to 80%, a year-on-year decrease of 4.9%.
