China ethylene capacity to expand rapidly in the backdrop of reducing refined oil but increase chemicals

China's refining capacity is expected to peak during the "15th Five-Year Plan" period.

In recent years, with the concentrated commissioning of large refining and chemical projects such as Hengli, Zhejiang Petroleum & Chemical, Shenghong Refining & Chemical, PetroChina Guangdong Petrochemical, Yulong Petrochemical, and Sinopec Zhenhai Refining Phase II, China's refining capacity has been rapidly increasing.

By 2024, China's domestic refining capacity has reached 955 million tons/year. According to current construction, expansion, and planned projects, China's refining capacity is expected to peak at about 980 million tons/year in 2027-2028. Afterwards, with the phase-out of some backward production capacity, it is expected that by 2030, China's refining capacity may stabilize at about 960 million tons/year.

Under the background of "reducing refined oil and increasing chemicals", the ethylene industry may see a peak in new production capacity. As the cornerstone of petrochemical industry, ethylene is an important indicator of a country's petrochemical strength. In recent years, China's ethylene industry has been booming. According to statistics, China's ethylene production capacity reached about 47 million tons/year in 2022, surpassing the United States to become the world's largest ethylene producer for the first time. By 2024, China ethylene production capacity has reached nearly 55 million tons/year.

In recent years, the rapid development of the new energy industry has accelerated the substitution of traditional fuels, leading to a gradual weakening of gasoline demand. Meanwhile, China's chemical industry still faces some shortcomings, with high import dependence for some products.

Therefore, there will be many ethylene plants coming online in the next few years in China, which will drive ethylene production capacity to a new level. The following lists the refining and chemical integration projects and refinery transformation plans for the next five years.