The 21st China Hangzhou·Chemical Fiber Forum (2022)—Excerpts from the meeting

1. The impact of “double carbon” on the development of my country’s petrochemical industry—Li Yujing China Petroleum and Chemical Industry Federation

1. New situations and problems faced by the petrochemical industry

　(1) Market demand is insufficient

① The conflict between Russia and Ukraine has both pushed up oil prices and impacted the supply chain. ②The epidemic has a greater impact on the supply chain. ③Supplies in Europe, America, Southeast Asia and other regions have recovered, and export orders are returning overseas.

(2) The price transmission in the industrial chain is poor, and the profits of most petrochemical products have dropped significantly

　2. High quality development bottlenecks in the petrochemical industry

　(1) Unreasonable industrial structure

①The raw material structure focuses on coal, and it is the world’s largest modern coal chemical industry country. ②Polyvinyl chloride: Basically all developed countries use the ethylene oxychlorination method. In my country, the calcium carbide acetylene method is the main method, accounting for about 80%. ③Synthetic ammonia and methanol: Developed countries mainly use natural gas as raw materials, while my country mainly uses coal, accounting for 75%. ④Formaldehyde, acetic acid, polyvinyl alcohol (carbide method), BDO (alkylenic aldehyde method), etc. all use coal as the main raw material.

　(2) Unreasonable product structure

①High energy-consuming products account for a high proportion. ② High-end chemical products are still heavily dependent on imports. High-performance fibers and high-end membrane materials have been dependent on imports for many years.

3. High-quality development ideas for my country’s petrochemical industry under the background of “double carbon”

(1) Change development concepts and rationally control new production capacity

① Change the original concept of heroes based on “scale” and “increase” to “benefit per mu”. ②New projects should focus on: volume, life cycle and barriers.

　(2) Promote industrytransformation and upgrading

① Strict energy efficiency constraints and guide the orderly exit of inefficient production capacity. ② Promote the elimination of refining units with a capacity of 2 million tons/year and below, ethylene units with a capacity of 300,000 tons/year and below, and paraxylene units with a single series capacity of 600,000 tons/year and below. ③”Reduce oil and increase chemical”, “Reduce oil and increase specialness”. ④ Promote the lightweighting of olefin raw materials steadily and rationally. ⑤Private enterprises such as Hengli, Rongsheng, Hengyi and Shenghong have or will soon open up the entire oil refining-PX, ethylene-PTA, ethylene glycol-polyester-chemical fiber industry chain, the concentration of CR5 in the PC industry chain continues to increase, and the pricing and profitability of leading companies in the industry chain are increasing.

　(3) Accelerate technological innovation

① Green and low-carbon technology: The first is energy-saving and low-carbon technology, including molecular refining, direct production of chemicals from crude oil, etc.; the second is CCUS technology, including carbon dioxide synthesis of high-value chemicals, etc. ②Weakness-filling technologies: In the fields of chemical industry new materials, electronic chemicals, major technical equipment and key parts and components, overcome a number of shortcomings-filling technologies and improve core technologies and equipment Ability to be autonomous and controllable. ③Key common technologies: Break through a number of key common technologies in the industry in the fields of catalysis, process intensification, advanced membrane separation, industrial biotechnology, information and advanced control technology, and lay a solid foundation for development.

Specific technical aspects: ① Domestic crude oil steam cracking technology and crude oil catalytic cracking technology have made breakthroughs. A. ExxonMobil’s 1 million tons/year ethylene unit on Jurong Island in Singapore is the world’s first COTC project. The chemical yield is as high as 50%-70%. B. Sinopec’s crude oil steam cracking technology and crude oil catalytic cracking technology were successfully tested in Yangzhou Petrochemical and Tianjin Petrochemical Industries. C. CNOOC has independently developed a direct-to-chemicals (DPC) technology suitable for naphthenic intermediate crude oil (heavy oil), and has successfully conducted industrial trials in the 1.2 million tons/year catalytic cracking unit of Huizhou Petrochemical. D. China University of Petroleum (East China), Dongming Petrochemical and Shanghai Zhuoran built a 50,000 tons/year crude oil catalytic cracking to olefins (UPC) technology industrialization test device in Dongming Petrochemical. ② The key core technologies to achieve carbon neutrality, using carbon dioxide as raw materials to produce methanol, DMC, PPC, syngas, etc., have been industrialized. Carbon dioxide hydrogenation to produce methanol/gasoline, carbon dioxide and alkylene oxide to synthesize DMC, carbon dioxide and propylene oxide to synthesize PPC degradable plastics, carbon dioxide and methane dry reforming to produce syngas, carbon dioxide and ethylene to synthesize acrylic acid, carbon dioxide to synthesize starch, carbon dioxide and water Synthetic polypropylene.

　(4) Accelerate digitalization and intelligent transformation

Since the “Thirteenth Five-Year Plan“, a number of petrochemical companies have passed smart factory pilot demonstrations, and their production efficiency and management level have been greatly improved. Material consumption, energy consumption and three waste emissions have also been significantly improved. Reduced, the effect is obvious.

(5) Optimize industrial layout and improve the level of intensification

① Give full play to the logistics advantages along the coast and rivers and build large-scale refining and comprehensive utilization projects of light hydrocarbons. ② Rely on the existing advantageous enterprises to carry out “reducing oil and increasing chemicals” and “refining and chemical integration” transformation. ③ Give full play to the location advantages of resource-rich areas and develop modern coal chemical industry in a steady and orderly manner. ④Integrate and improve production capacity to promote the development of industrial agglomeration.

2. Changes in PX trading pattern in the process of localization—Chen Canzhong Hengli Petrochemical

1. Conjecture on the evolution of PX trading pattern

(1) Domestic PX production capacity launch progress

In recent years��Filament yarn will be reduced in price twice, once in March-April and once in June-July, with a cumulative reduction of 30%.

Reason: Filament load adjustment needs to consider inventory factors. The inventory tolerance of filament is higher than that of short fiber. The high point of physical inventory of short fiber is 20 days, while filament can basically withstand more than one month. This year, the short fiber equity inventory has been the highest for 10 days, and the filament inventory has continued to be at a one-month high. The factory will take inventory factors into account when calculating profits. When the 25-day moving average cost cash flow shows a loss, polyester filament production will be reduced. Will accelerate, especially leading companies with high inventories will join in production cuts, leading to further decline in load.

　(5) Polyester bottle flakes – the current star product

In the first half of the year, the cash flow and load of polyester bottle flakes increased significantly compared with last year, and reached a new high in recent years.

Exports are the biggest driving force behind the bottle flakes market. After the epidemic control was fully relaxed last year, overseas demand increased, driving the demand for bottle tablets to increase. At the same time, since the fourth quarter of last year, overseas energy prices have been high, raw material supply is in short supply, bottle flake production has been reduced significantly, and the gap between supply and demand has led to a substantial increase in China’s bottle flake exports since the fourth quarter of last year.

(6) The commissioning of new polyester equipment in the second half of the year may continue to be delayed

Due to the epidemic and logistics dragging down the progress of the project, coupled with the industry recession, the launch of new polyester production capacity was delayed in the first half of the year. There are many plans to put new polyester equipment into production in the second half of the year, but the industry downturn will continue to drag down the progress of polyester production, and the actual volume will be greatly reduced.

　(7) Downstream weaving startup is slowly improving

Based on the slow recovery in overall demand and the high inventory in the industry, the recovery in downstream startups will be slow. Judging from the rhythm, July and August are in the industry’s off-season, coupled with local power cuts, the downstream weaving start-up is expected to only hover at 50-60%, and there may be a chance to increase to 60-70% in September-October.

(8) High inventory and weak demand, polyester load recovery in the second half of the year is bumpy

The polyester load inflection point appeared in July, but the future recovery trend is relatively bumpy and the room for growth is limited. The peak load in the second half of the year is expected to occur in September-October. The full-year polyester production growth rate is expected to be near zero growth.

AAA

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