China petrochemical sector displays stability
China’s petrochemical sector is showing signs of stability and recovery despite rising global uncertainties, an industry report shows.
Its output, together with the trade volume of petrochemical products, rose in 2023 amid an intricate landscape, laying the groundwork for robust prospects in 2025, said Fu Xiangsheng, vice-president of the China Petroleum and Chemical Industry Association, during a news conference in Beijing.
The sector has contributed substantially to both domestic energy security as well as food security, with increased output of refined oil products, fertilisers and pesticides, he said.
According to the association, exports of refined oil products, including gasoline and diesel, rebounded strongly after three years of decline, with a total export volume of 41.98 million tonnes in 2023, a 21.9% increase year-on-year (y-o-y).
National fertiliser exports reached 31.46 million tonnes, up 27.2% y-o-y, while pesticide exports amounted to 2.46 million tonnes, up 9.7% y-o-y, it said.
After two consecutive years of decline, China’s crude oil imports rapidly rebounded last year, reaching 564 million tonnes, up 11% y-o-y, it said.
Petrochemical product output also witnessed rapid recovery, with the output of refined oil products reaching 428 million tonnes, an increase of 16.5% y-o-y, surpassing the previous year’s growth rate by 13.3 percentage points.
The total production of major chemicals, including ethylene, sulfuric acid, and fertilisers, turned positive last year, growing by about 6% y-o-y to 720 million tonnes, according to data from the association.
Despite the growth in output as well as
import and export volume, Fu stressed the need for increased production efficiency to improve profits, highlighting the sector’s potential for further improvement.
While profits in the petrochemical sector have not kept pace with production last year, there is considerable space and potential for improving efficiency, said Fu.
China is on course to becoming a petrochemical heavyweight, he said.
While energy and chemical enterprises are making new contributions to ensure energy security amid global uncertainties and conflicts, concerns about severe overcapacity still persist, said Lin Boqiang, head of the China Institute for Studies in Energy Policy at Xiamen University.
China is already grappling with distillation overcapacity, and it is necessary for the industry to prioritise structural optimisation and increased investments in highend development rather than solely focusing on expanding scale, said Lin.
Fu also said that the severity of overcapacity must be duly acknowledged.