China’s PE capacity sets to grow in 2025

After the startup of 400kt/year HDPE plant of Ningxia Baofeng III in Sep 2023, there has been no new startups for China's polyethylene for over a year. It was not until the end of 2024 to the beginning of 2025 that new plants were intensively launched, including Sinopec/Ineos Tianjin commenced in Nov, Yulong Petrochemical and Inner Mongolia Baofeng in Jan 2025. Therefore, total China domestic PE production capacity has reached 35.095 million tons.

In addition, HDPE/LLDPE #2 plant of Inner Mongolia Baofeng started test run around January 10th, and LDPE plant of Wanhua Chemical II started production around January 14th. Although they have not been included in the total production capacity for the time being due to the low stability of the plants, the overall production capacity is still expected to continue to rise. There are also some production capacities that have not been put into production yet. It is initially expected that by the end of 2025, total China domestic PE production capacity will reach 41.025 million tons (without considering the expected delay of the plants for the time being).

Regionally, the North China region witnessed the largest increase, with a total of 2.7 million tons/year new plants. This was mainly attributed to Shandong Yulong Petrochemical, Wanhua Chemical II, and Shandong Jincheng Petrochemical. Next was the South China region, with a 2.33 million tons/year increase. The ExxonMobil Huizhou project have a relatively large capacity, significantly boosting the capacity proportion of the South China region. Additionally, Inner Mongolia Baofeng in the Northwest region, with a total of 1.9 million tons/year of new capacity. Therefore, the supply pressure in these three regions will become more evident in the future market, and the supply contradictions in various regions across the country will gradually come to the fore.