Polypropylene Production Declines in China

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Researched by Industrial Info Resources (Sugar Land, Texas)--China's current petrochemicals overcapacity, which has been attributed to a rapid, unbalanced development in primary and niche chemicals, has put the country in a precarious situation. Last year's government stimulus, which was intended to curb production and control overcapacity, could make things difficult for China in the future. As niche and secondary chemical production picks up to decrease the dependence on imported products, overcapacity will cease to be a problem, but undercapacity could replace it. Already, projects for new plants, unit additions and expansions seem to be slowing down. Refining projects, on the other hand, are picking up since China's current refining capacity will not be able to support the future demand for petrochemicals.

Polypropylene, known for its fatigue resistance and often used for "living hinges," is following China's petrochemical trend as well. Between the beginning of 2011 and the end of 2012, projects accounting for more than 2.3 million metric tons per year of polypropylene will see completion. So far, however, projects accounting for nearly less than half that amount are scheduled for commencement during the same time frame, despite the greater cost of investments.

The most expensive of the projects to commence within the next two years is Guangxi Zhouji Petroleum Chemical Company Limited's (GZPC) (Qinzhou, China) new polypropylene plant, which is scheduled for construction in Qinzhou, in Guangxi province. As it stands, GZPC plans to begin construction sometime during the first quarter of 2011, although the grassroots facility will not see completion until early 2013. When commissioned, the Qinzhou facility will have a maximum operation capacity of 500,000 metric tons per year of polypropylene.

Other polypropylene projects to kick-off during this time are likely to be unit additions or expansions. The largest of these will be Shandong Yuhuang Chemical Company Limited's (Heze, China) polypropylene unit addition at its complex in the Wusheng Development Zone (WDZ) in Heze, in Shandong province. When completed in 2012, the WDZ complex will begin producing an initial 600,000 metric tons per year of polypropylene.

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