China’s Ethylene Production Capacity Set to Exceed 62 Million Tons a Year

On 26 October, PetroChina Guangxi Petrochemical commenced feedstock processing at its newly constructed 1.2 million tonnes per annum ethylene plant.

The facility, which utilises China National Petroleum Corporation's (CNPC) proprietary large-scale ethylene technology, is designed to produce 1.2 million tonnes of polymer-grade ethylene annually. Its output will also include polymer-grade propylene, hydrotreated gasoline, styrene, and more than 20 by-products, including hydrogen, cracked C5 hydrocarbons, C9 hydrocarbons, and cracked fuel oil. Among these, the production of high-end membrane and pipe materials is expected to directly address specific supply shortages within the Chinese domestic market.

The plant's commissioning signifies the complete transformation of PetroChina Guangxi Petrochemical from a refinery focused primarily on fuels into an integrated refining and petrochemical enterprise specialising in chemical products and organic materials.

This project is a major component of China's national petrochemical industry planning. It is designated a key undertaking for the development of the Western Land-Sea New Channel and for enhancing China's competitiveness within the RCEP (Regional Comprehensive Economic Partnership) international market. Leveraging the Western Land-Sea New Channel, the plant's products will be distributed to markets in Southwest China, South China, and ASEAN nations, meeting demand along the route and stimulating growth in regional downstream industries such as packaging, building materials, and automotive manufacturing.

This initiative aligns with CNPC's broader strategic focus within the refining and petrochemical sector. The corporation is pursuing a path of 'reducing oil processing while increasing chemical production', 'reducing oil processing while increasing specialised products', and 'reducing oil processing while increasing green production'. Through optimising its production capacity structures, advancing key project construction, and strengthening technological innovation, CNPC aims to propel its operations towards the mid-to-high end of the industrial and value chains. The company's refining and petrochemical segment currently possesses a crude oil primary processing capacity exceeding 200 million tonnes per annum, forming a multi-million-tonne-scale refining cluster.

Ethylene production is a key indicator of a nation's petrochemical development. China became the world's largest ethylene producer in 2022. Industry analysis indicates that the country's planned and under-construction ethylene capacity currently exceeds 40 units, with 2025-2026 remaining the peak years for new additions. In 2025 alone, China's new ethylene capacity is projected to be close to 10 million tonnes per annum. This will boost the country's total ethylene output to 53.3 million tonnes, representing an 11.9% year-on-year increase, with aggregate capacity reaching approximately 62 million tonnes per annum. Capacity growth is expected to moderate by 2027, and China's ethylene equivalent deficit is projected to be largely eliminated by 2028, achieving self-sufficiency in both ethylene and its primary downstream products.

Driven by policies promoting carbon neutrality, new materials, and renewable energy, coupled with rapid consumption growth in the new energy sector, ethylene downstream applications are expanding into high-value-added fields. Products such as speciality polymers and high-performance membrane materials, including Polyolefin Elastomers (POE) and ultra-high molecular weight polyethylene (UHMWPE), command profit margins far exceeding those of traditional polyethylene and are becoming focal points for corporate competition. With the rapid rise of China's new energy industries-including new energy vehicles, photovoltaics, and wind power-new materials that serve as key raw materials, such as photovoltaic-grade EVA, POE, and UHMWPE lithium battery separator materials, are experiencing fresh growth opportunities.

Furthermore, as China's manufacturing sector undergoes transformation and upgrading, high-end fields such as rail transit and medical equipment are creating new development opportunities for the high-end new materials segment within ethylene's downstream applications, demanding exceptionally high standards for material performance, precision, and reliability.