PP production capacity expansion continiously

As China’s polypropylene enters the peak of capacity expansion, the contradiction between supply and demand becomes increasingly prominent as the demand growth rate is lower than expected. The polypropylene industry is about to enter the period of overall surplus. Affected by the impact of enterprise losses in the first half of 2022, the production schedule of new devices is delayed.

In 2023, domestic polypropylene will usher in the year with the largest capacity expansion in history. However, due to the common delay of the device this year, and the uncertainty of the time of the investment and construction of new devices, it is expected that there will be many variables in the future new devices. As many devices are already under construction, the problem of oversupply in the polypropylene industry in the future is inevitable.

In terms of the regional distribution of polypropylene capacity expansion in the future, north China is expected to grow the fastest, accounting for 32%. Shandong is the province with the largest capacity expansion in North China. South China accounts for 30% and East China for 28%. In northwest China, due to the reduction of project investment and construction of coal processing enterprises, the new capacity is expected to be only about 3% in the future.

In March 2022, the output was 2.462,700 tons, down 2.28% from the same period last year, mainly due to the loss of all production enterprises, which led to the reduction of production in some enterprises In the first six months of 2022, the output is expected to reach 14.687 million tons, an increase of 1.67% compared to 14.4454 million tons last year, a significant decrease in the growth rate. However, due to weak demand, the contradiction between supply and demand has not been substantially alleviated Overall, in 2022, China’s polypropylene production capacity is still at the peak of expansion, but due to the high cost caused by the oil price surge and the impact of the epidemic, the actual production progress slowed down greatly in the first half of the year, and the negative impact of the reduction of production by some enterprises, the actual production growth was limited On the demand side, there will be no new growth points in major downstream consumption sectors in 2022, traditional industries will face downward pressure, emerging industries will have a very low base and it is difficult to form effective support, and the contradiction between supply and demand in the market will be prominent and weigh on market prices for a long time It is expected to add 4.9 million tons of new capacity in the second half of the year. Although some installations are still delayed, the supply pressure is obviously increasing, and the contradiction between supply and demand in the market is worsening.



Post time: Jun-30-2022