HDPE Fundamentals Undergoing Quiet Change amid Fast Capacity Growth
Preface: China’s HDPE capacity grew rapidly in 2021. As new feedstock energy, light ends grasped more market shares. With the development of the market economy and the continuous advancement of refining-chemical integration projects, local enterprises have developed rapidly. Relying on the advantages of product diversification and timeliness of price adjustments, HDPE’s market share continues to increase.
1. China HDPE Capacity Change Trend
2017-2021 China HDPE Capacity
From 2017 to 2019, the growth rate of HDPE capacity was slow. With the rapid development of the express packaging industry driven by e-commerce, the advancement of the urbanization process, increasing infrastructure construction, the launch of the three-children policy, etc. the demand for HDPE film, pipe, BM, etc. went up strongly. In the meantime, the quality requirements of plastic products also constantly improved. Therefore, after 2020, both HDPE unit and FDPE unit went into a period of concentrated capacity expansion. The average growth rate of HDPE capacity from 2020 to 2021 was 27.91%, which was 21.49% higher than that from 2017 to 2019.
From the perspective of regional distribution, Northwest China still occupies the first place in the distribution of HDPE capacity in China, given the abundant resources and increased infrastructure development in recent years. However, the distribution of newly added capacity is gradually shifting to the consumption area. Under the influence, East China saw the largest increase, thanks to the economic, consumption and transportation advantages. Meanwhile, driven by the optimization of energy structure and the accelerating of industrial transformation and upgrading, the share of light ends as new feedstock energy has increased significantly. With the development of the market economy and the continuous advancement of refining and chemical integration projects, local enterprises have developed rapidly and continue to grasp the HDPE market share by virtue of product diversification and price adjustment timeliness.
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