Can NDRC directives accelerate China’s focus on value-added polyethylene investments? Report

Insight 09 January 2020

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Report summary

China’s Directory of Guidance for Industrial Restructuring came into force on 1 January 2020. The guidance, which aims to enhance the development of China’s industrial sector, encourages investment in innovative products to meet domestic demand and replace imports. Metallocene polyethylene (mPE) and alpha-olefins are two of the petrochemical products specified in the directory. Demand for mPE is growing rapidly in China, driven by advances in packaging and agricultural film, as well as urbanisation and infrastructure construction. The guidance also encourages coordinated alpha-olefins investment.

Guidance encourages investment in innovative petrochemical products
Fast-growing demand and deficient domestic supply weakens Chinese convertors’ bargaining ability
China mPE production is increasing – albeit slowly
Alpha-olefins investment also encouraged to match mPE development
Opportunities and challenges
Conclusions

Tables and charts

This report includes the following images and tables:

mLLDPE-LLDPE CFR China spread increase
China mPE capacity increase
Sinopec is using its own technology to produce mPE while PetroChina is using foreign technology
China alpha-olefins capacity increase