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How will China's polyethylene industry tackle overcapacity
*Please note that this report only includes an Excel data file if this is indicated in "What's included" below
Report summary
After massive capacity addition, China's polyethylene industry is expected to muddle through a slowdown with the escalating competition. It is observed that China's domestic operators are actively investing in both EVA and mLLDPE sectors, which are regarded as high-value polyethylene derivatives. The question remains, after another round of investment rally toward both high-end sub-markets, will the growth from those niche markets provide positive return?
Table of contents
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Executive summary
- Production of specialised PE grades in China is no longer the obvious pivot for producers
- Background
- EVA
- mLLDPE
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China polyethylene muddling through a slowdown with escalating competition
- With 22 Mt of PE capacity set to be added from 2023 to 2030, China’s operating rate will fall
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Capacity growth in specialty PE grades is faster than in commodity grades
- Producers are turning to high-end PE derivatives – mLLDPE, POE and EVA – to secure higher margins. EVA is forecast to have the highest capacity growth.
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EVA has experienced the strongest growth since 2018
- EVA demand has more than doubled over the past six years
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Surging demand from China’s photovoltaic industry has induced EVA demand hike
- While the first half of 2020s is seeing remarkable PV growth, we forecast negative production growth from 2025
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Global PV module growth is at risk of entering plateau from 2024
- While first half of 2020s is seeing remarkable PV growth, we forecast negative production growth from 2025
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China EVA industry is facing sharply declining operating rates from 2025
- The average operating rate of Chinese EVA production is forecast to decline to 55% by 2027
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China mLLDPE highly relies on imports, with limited improvement on domestic production
- mLLDPE is the second largest category among all PE specialty derivatives in China, next to EVA
- China Domestic mLLDPE Supply Outlook
- China mLLDPE is estimated to have 2.1% CAGR growth till 2030
Tables and charts
This report includes the following images and tables:
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China mLLDPE Supply & Demand OutlookChina polyethylene supply outlook 2018-2030China polyethylene capacity growth by category
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China EVA Supply & Demand Outlook 2018 to 2023China EVA demand segmentationGlobal module production forecast by regionChina EVA supply and demand growthChina mLLDPE Supply & Demand Outlook
What's included
This report contains:
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