The year 2023 is the key year of China’s 14th Five-Year Plan, which will directly determine the overall goal and progress of the development of China’s chemical industry during the 14th Five-Year Plan period. Therefore, the impact of 2023 on the development of the chemical industry will focus on the following aspects: first, for the state to clearly prohibit and discourage the project, will start to accelerate the purging and elimination of the process, is expected to be further accelerated during the period of 2024-2025; second, for the structural imbalance in China’s chemical industry chemicals, or to increase its investment and start-up efforts to alleviate the imbalance of the industry; third, for the traditional bulk chemicals and polymer materials products, will accelerate their technological upgrading Thirdly, for traditional bulk chemicals and polymer materials products, the decline in energy consumption and carbon emissions brought about by their technological upgrading will be accelerated.
Therefore, from recent years, China has been accelerating the correction of structural imbalance of chemicals, to improve the structure and proportion of high-end products, of which UHMWPE is an important representative product.
Due to its excellent material properties, UHMWPE has led to the entry of many enterprises, and the scale of the industry is rapidly increasing. Especially in 2023, it is estimated that there will be many sets of units put into production, China’s ultra-high molecular weight polyethylene industry will usher in explosive growth?
Ultra-high molecular weight polyethylene, abbreviated as UHMWPE, is produced by the polymerization of ethylene, and the production process is similar to that of ordinary high-density polyethylene, which is produced by the polymerization of ethylene using Ziegler’s catalyst under certain conditions. Domestic ultra-high molecular weight polyethylene is mostly based on the third generation of Ziegler-Natta catalyst, and there are three domestic companies mastering the core technology, namely Shanghai Research Institute of Chemical Industry, Shanghai Institute of Organic Chemistry of the Chinese Academy of Sciences, and the newly-added ZhongXi New Materials (Anhui) Limited, which has cooperated with Beijing University of Chemical Technology. China’s ultra-high molecular weight polyethylene production technology method for the use of polymerization method in the reactor to add catalyst and ethylene, through the polymerization reaction to obtain ultra-high molecular weight polyethylene, the main process includes catalyst preparation, catalyst and ethylene polymerization, vapor precipitation, drying and other links, precipitation process has a solvent recovery link, drying process has a vacuum link of water vapor.
In China’s ultra-high molecular weight polyethylene segment consumption, the sheet and profile field is relatively mature and stable development, has been China’s ultra-high molecular weight polyethylene’s largest application areas, followed by pipe, diaphragm and fiber. Downstream can be applied in cable, fishing nets, labor protection supplies, artificial bones, military supplies and other fields, the application field is higher-end than traditional polyethylene varieties.
According to relevant data, as of the end of 2022, China’s UHMWPE market size of 233,600 tons, production ranging from 16-17 million tons, imported more than 120,000 tons, basically no exports, so in 2022 China’s apparent consumption of UHMWPE has exceeded 280,000 tons!
Due to its excellent material properties, UHMWPE is defined as a high-end new material product. According to the apparent consumption growth rate in the past few years, the overall scale of UHMWPE consumption in China has shown an average annual growth rate of more than 8%, which is much faster than the growth rate of China’s economy and faster than the growth rate of China’s polyethylene.
Much of the investment logic in China’s chemical market has been characterized by disorderly and blind expansion, which accelerates the cyclical process of the industry by grabbing market share through low price competition. As a result, China’s UHMWPE has seen explosive growth in recent years, with at least two new units added in 2022 and more than six expected in 2023. Moreover, a Chinese state-owned enterprise is now vigorously laying out the industry, and is expected to become an emerging leading company in China.
The total production scale of the new devices in 2023 will be more than 310,000 tons, and if all the 6 devices are put into production, the overall production scale of UHMWPE in China will reach about 540,000 tons/year, with an amazing growth rate of 133%. What is the concept that China’s UHMWPE will show double growth in 2023?
Representative new installations in 2023 are: Zhongxi New Materials (Anhui) Co., Ltd, SINOPEC Tianjin Nangang Ethylene, Anhui Fengda New Materials Co., Ltd, Lianhong New Materials Technology Co., Ltd, Hubei Yuhong High-tech Material Science and Technology Co., Ltd Phase II and Shandong Yulong Petrochemical Co.
Not only UHMWPE, within the period from 2023 to 2024, there will be more new chemical projects put into operation in China, these projects, all of which will be a significant increase in the size of the existing installations, is a manifestation of the scale of development of China’s chemical industry.
UHMWPE has excellent material properties and wide downstream applications, and it is also the main representative of China’s high-end new materials. However, technological breakthrough does not mean that the consumer market is also breaking through, the explosive growth of China’s UHMWPE scale, on the one hand, will cause industrial supply and demand contradiction to deteriorate and shorten the industrial cycle; on the other hand, the industrial scale growth, but the technology can not be realized breakthroughs under the premise that the downstream consumer market will not be a faster growth rate will further exacerbate the contradiction between the supply and demand of the market. Thirdly, China’s UHMWPE will be exported in the short term, especially in the Southeast Asian market under the trend of manufacturing upgrading, the consumer demand for high-end new materials is growing rapidly, or will ease the domestic supply and demand contradictions in the next five years.
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