Chemical Industry Status and Prospects

--Foreseeing 2022: "China's Petrochemical Industry Panorama 2022" (with market status, competition pattern and development prospects, etc.)

Major listed companies in petrochemical industry: At present, the domestic petrochemical industry listed companies are mainly Sinopec (600028), PetroChina (601857), Donghua Energy (002221), Huajin (000059), Hengyi Petrochemical (000703), Rongsheng Petrochemical (002493), Shanghai Petrochemical (600688), Huaru Hengsheng (600426), Compton (603798), Satellite Petrochemicals (002493), Shanghai Petrochemical (600688), Huaru Hengsheng (600426), Compton (603798), Satellite Petrochemicals (603798), Shanghai Petrochemicals (600688), Huaru Hengsheng (600426), Compton ( 603798), satellite petrochemical (002648).

The core data of this article: industry development, industry status, industry outlook

Industry Overview

1, Definition: Raw Materials - Petroleum Products - Petrochemicals

Petrochemicals refers to the use of Oil and natural gas as raw materials, the production of petroleum products and petrochemical products processing industry.

Petroleum products, also known as oil products, mainly include a variety of fuel oils (gasoline, kerosene, diesel, etc.) and lubricating oils as well as liquefied petroleum gas (LPG), petroleum coke, paraffin waxes, asphalt and so on. The process of producing these products is often referred to as petroleum refining, or refining for short.

Petrochemicals are obtained by further chemical processing of the feedstock oil provided by the refining process. The first step in the production of petrochemicals is the cracking of feedstock oil and gas (such as propane, gasoline, diesel fuel, etc.) to produce ethylene, propylene, butadiene, benzene, toluene, xylene, as represented by the basic chemical raw materials. The second step is to produce a wide range of organic chemicals (about 200 types) and synthetic materials (plastics, synthetic fibers, synthetic rubber) from the basic chemical raw materials. The production of products in both steps falls within the scope of petrochemicals.

Organic chemical raw materials continue to process more varieties of chemical products can be made, customarily does not belong to the scope of petrochemicals. In some materials, natural gas, light gasoline, heavy oil as raw materials for the synthesis of ammonia, urea, and even the production of nitric acid is also included in the petrochemical industry.

2, industry chain analysis: the complexity of the industrial process, a large number of products

Petrochemical industry upstream is mainly petroleum mining and refining industry, including oil and gas extraction and transportation, refining and processing of petrochemicals and manufacturing processes, the middle reaches of the basic organic and polymer industry, downstream industries for agriculture, energy, transportation, machinery, electronics, textiles, light industry, construction, building, and so on. The downstream industries provide support and services for agriculture, energy, transportation, machinery, electronics, textile, light industry, construction, building materials and other industries and agriculture and people's daily life. It should be noted that in the petrochemical production process, in order to promote the refining and decomposition process, chemical catalysts will be added to improve processing efficiency.

Industrial development history: a history of hard struggle

China's petrochemical industry development history, but also a history of struggle. 1949 the early days of the founding of new China, China's petroleum and chemical industry is very backward, the majority of petrochemical cadres and workers in the old China, "penniless The majority of petrochemical cadres and workers in the old China "poor and penniless" on the basis of a weak foundation of hard work and selfless dedication. After four stages of continuous exploration and development, including the recovery and development stage, the historic transformation stage, the new rise stage, the stage of the new development period, China has become the world's second largest producer and consumer of petroleum and chemicals.

Industry policy background: from vigorous development to optimize the industrial layout

Petrochemical industry is an important pillar industry of the national economy, in recent years, China's petrochemical industry development and construction of the relevant policies for China's petrochemical industry development and construction of the rapid development of petrochemical industry to provide protection.

Carbon neutrality or bring disruptive changes and opportunities in the petrochemical industry. In order to realize the goal of carbon peak and carbon neutrality, industries such as iron and steel, electric power, petrochemical and coal are accelerating their transformation. Many listed companies have formulated a roadmap for carbon peak and carbon neutral. Carbon peak carbon neutral target to the green low-carbon transformation of petrochemical enterprises has brought greater pressure, but in the process of transformation at the same time pregnant with new development opportunities, including the development of new energy, new materials, new business opportunities, to promote fossil energy-led energy structure, industrial structure and economic structure to be dominated by renewable energy sources, the process of driving the industry to reconfigure the industrial chain value chain, the need to rely more on technological innovation to drive the process of achieving carbon emission reduction targets from a fundamental perspective. Achievement of carbon emission reduction targets in the process of fundamentally changing the structure of the petrochemical industry form.

Industry development status

1, refined oil production: production hit a new high

2020 by the impact of the epidemic, the gasoline market demand fell sharply. 2020 the national gasoline production of 131,797,000 tons, a year-on-year decline of 7.03%. For the whole year, the low level of China's refined oil products production appeared in the first quarter, due to the extension of the Spring Festival holiday in 2020, the spread of the epidemic has caused many refineries to rapidly decline in the working load, the main units and independent refineries in Shandong have ushered in the low point of the year in the first quarter. 2-3 months due to the epidemic nationwide in a state of blockade, the gasoline production in March was the lowest, and then with the resumption of production and re-opening of work, the gasoline production increased gradually, basically restored to the same period of the previous years. In 2021, gasoline production reached 154.573 million tons, a cumulative increase of 17.3%.

China's diesel production from 2018, the production of three consecutive years of decline, to 2020 China's diesel production fell to 157.049 million tons, compared with 2017 diesel production fell 24.131 million tons. Under the effect of a variety of factors, the cost of refineries has been rising, but the price has remained stable, making the willingness of refineries to produce diesel fuel lower, and diesel fuel production declined.The annual diesel fuel production in 2021 was 163.370 million tons, with a cumulative growth of 2.7%.

In 2010-2019, China's kerosene production increased year by year, and in 2019 the output reached 52.726 million tons, a year-on-year increase of 10.6%; in 2020, affected by the domestic emergence of public ****health incidents, the Chinese New Year holiday was extended, and the industries delayed the resumption of work, China's kerosene production was only 40.494 million tons, a year-on-year decrease of 23.2%;

China's kerosene output in 2021 was 39.439 million tons, down 2.6% year-on-year.

In 2010-2019, China's fuel oil production fluctuated in a wide range. in 2019, China's fuel oil production was 24.697 million tons, up 19% year-on-year. in 2020, fuel oil production was 34.063 million tons, up 37.9% year-on-year. in 2021, fuel oil production was 43.502 million tons, with a cumulative increase of 22.1% year-on-year.

Naphtha (naphtha), also known as chemical light oil, is one of the petroleum products, which is a light oil used as a chemical raw material produced by processing of crude oil or other raw materials, and is mainly used as a reforming and chemical raw material. There are different distillation ranges due to different uses, and China stipulates that the distillation range is from the first distillation point to about 220°C. It is used as a raw material for the reforming of aromatic hydrocarbons. As the production of aromatics reforming raw materials, the use of 70 ℃ -145 ℃ fraction, called light naphtha; used as a solvent, it is called solvent naphtha; to produce high-octane gasoline for the purpose of the use of 70 ℃ -180 ℃ fraction, called heavy naphtha; from the coal tar aromatic solvents are also called heavy naphtha or solvent naphtha.

In recent years, China's naphtha production has gradually increased. 2020 naphtha production further increased to 42.320 million tons, an increase of 8.6% year-on-year, the output to achieve five consecutive years of growth;

2021 China's naphtha production of 49.517 million tons, an increase of 12.6%.

2, chemical production: ethylene production growth is significant

In the past two years, by the market price rebound and other impacts, shutdown for many years of multiple sets of synthetic rubber device resumed production, China's synthetic rubber market supply and demand to maintain a stable development in 2020 China's synthetic rubber varieties of production growth to 7,513,200 tons, a growth rate of 0.99%, but a number of sets of devices can be put into production on time, there is still a large uncertainty. 2021 China's main synthetic rubber production of 8.117 million tons, an increase of 2.6% year-on-year.

According to the latest data from the National Bureau of Statistics, China's ethylene output in 2020 was 21,599,600 tons, an increase of 5.25% year-on-year; ethylene output in 2021 was 28,257,000 tons, an increase of 30.82% year-on-year, and it is expected that the pace of new production capacity in the future to further accelerate.

According to the latest data from the National Bureau of Statistics, China's chemical fiber production of 58.8337 million tons in 2020, an increase of 8.59% year-on-year; chemical fiber production of 61.2468 million tons in 2021, an increase of 4.10% year-on-year, is expected to further accelerate the pace of new production capacity in the future.

Industrial Competition Pattern

1, regional competition: pattern of distribution is obvious

Currently, China's petrochemical industry is ushering in the industrial restructuring of the enterprise to take advantage of the international and domestic markets and two kinds of resources, at the same time, to promote the industrial structure, the industrial structure, including economic structure adjustment and optimization. In recent years, the regional structure of China's petrochemical industry has been upgrading, backward production capacity has been eliminated, innovation capability has been upgraded, and the level of internationalized operation has been improved.

A precise search of "petrochemical" through Enterprise Search Cat shows that at the end of 2021, 355,291 related enterprises existed in the petrochemical industry, and in terms of the number of enterprises, the top three are Shandong Province, Shaanxi Province and Guangdong Province. They are 41,531, 31,605 and 26,789 respectively.

Note: Enterprise Cat data as of December 31, 2021

From the point of view of the distribution of representative enterprises, China's petrochemical representative enterprises are located in Liaoning, Shandong, Jiangsu, Zhejiang, Guangdong and other coastal provinces, as well as inland provinces, such as the Xinjiang Uygur Autonomous Region, Hunan Province and Heilongjiang Province.

2, corporate competition: PetroChina, Sinopec is the industry leader

At present, the layout of the petrochemical mining, smelting, precision processing business in the listed companies, PetroChina, Sinopec in the petrochemical oxides, petrochemical polymers, and other products output is far ahead of other enterprises. The business layout and competitiveness of other representative enterprises in the petrochemical industry chain are as follows:

By the amount of revenue from the main business, in 2020, China Petroleum & Chemical Corporation ranked first with an operating income of more than 2,100 billion yuan, accounting for as much as 19% of China's petroleum's market share in the industry as a whole, and China National Petroleum Corporation ranked second, with an operating revenue of no more than two trillion yuan The China National Petroleum Corporation (CNPC) ranked second, with business not exceeding the two trillion yuan mark, accounting for 17% of PetroChina's market share with 1,900 billion yuan. Together with the five mega-companies, China National Offshore Oil Corporation (CNOOC), China Sinochem Corporation, China National Chemical Corporation, Shaanxi Yanchang Petroleum (Group) Co. and Rongsheng Petrochemical, total sales revenue accounted for about 50 percent of the industry.

Industry development prospects and trend forecast

1, petrochemical development trend: "make up for the short board" and "fill the gap"< /p>

According to the China Petroleum and Chemical Industry Federation issued the "petrochemical and chemical industry" 14th Five-Year Plan Guide "clearly put forward," the 14th Five-Year "main task is to promote the modernization of China's petrochemical industry. Increase the richness of new chemical materials products and high-end level, through the "fill the short board" and "fill the gap" path; increase the application of product customization services.

2, petrochemical forecast: Internet + era, the petrochemical industry ushered in the development of new opportunities

The petrochemical industry and the deep integration of the Internet for the transformation of the enterprise to provide opportunities for the development of the future with the gradual deepening of the Internet + chemical model, the enterprise will be from the production-oriented gradually to the service-oriented transformation, and ultimately realize the financial market and the close integration. The company will be able to realize a close integration with the financial market in the end.

For more industry-related data, please refer to the China Petrochemical Industry Development Prospect Forecast and Investment Strategy Planning Analysis Report by Prospect Industry Research Institute.