[Industry Focus]：Analysis of the future development trend of China's chemical industry, "high-end" and "green" as the top priority

Globally, more than 100000 chemicals have been placed on the market, of which more than 70000 are widely used, and more than 1000 new chemicals are introduced every year. This makes the chemical industry extremely complex and diverse. However, chemical companies are facing a continuously changing industrial landscape and the challenge of escalating homogenization competition. To achieve long-term development in such an environment, China's chemical companies must have an accurate grasp of industry trends and flexibly adjust their strategic direction.

In view of the future development trend of China's chemical industry, the following is a brief analysis:

1, different chemical sub-industries are actively transforming.

In recent years, China's chemical industry has faced various challenges. Sub-sectors in different segments are actively seeking transformation or upgrading. For example, in the "14th Five-Year Plan Guide for the Petrochemical and Chemical Industry" issued by the Petroleum and Chemical Industry Planning Institute in 2020, it clarified the development ideas of promoting high-quality petrochemical development and green sustainable development. This plan emphasizes the promotion of industrial development through "eliminating production capacity, making up for shortcomings", adjusting the structure, and promoting upgrading.

2, petrochemical homogenization competition, upgrade bottlenecks

the petrochemical industry is facing a key problem, that is, how to achieve "oil reduction and increase". The homogenization competition in the oil market is fierce, and the product upgrading is limited, which leads to the comprehensive competitiveness unable to compete with the international market. In addition, the state has greater control over the oil market, which makes enterprises lack the motivation to make progress to a certain extent. The gradual withdrawal of local refineries from the market and the cleaning up of old production capacity have forced the refining industry to realize the transformation to "chemical industry" to meet the challenges of the future.

3, the traditional chemical industry "homogenization" serious, backward production capacity accounted for a large proportion.

There are two main problems in the traditional chemical industry. First of all, the problem of homogenization is serious, and the homogenization rate of many products is as high as 80% or even higher. Secondly, the old equipment and production capacity account for a relatively large proportion, and the old equipment of some products even accounts for more than 60%. These equipment must be integrated and updated.

Today's transforming enterprises face a number of challenges, including:

1. Unbalanced industrial chain: there is an imbalance in the development of the petrochemical industry chain, and a large number of petrochemical project capacity will be released in the next few years, further intensifying homogenization competition.

2, the pressure of integration: A new round of consolidation is expected around 2025. There are a large number of chemical enterprises in China, the concentration is low, the efficiency of resource allocation needs to be improved, and the construction of circular parks is also limited.

Challenges of technological innovation: the technological innovation system is not perfect, the transformation of basic research into industrialization is slow, and there is a shortage of core independent technologies.

4, the lack of research and development and application: many companies pay more attention to production and despise R & D and application, resulting in a relatively low level of product application research and less customized applications.

The challenges faced by the transformation of chemical companies are also a microcosm of the development of China's chemical industry. These problems cannot be completely solved in a short time. These challenges test not only a company's understanding of the industry, but also its cash flow. In this context, chemical companies need to dialectically look at the problems and difficulties in the market, and find a development path suitable for their own competitiveness. For example, you can circumvent the competitive direction of existing leading companies, or look for opportunities to support their development.

No matter which development path is chosen, China's chemical industry should follow the trend of "high-end" and "green. In terms of policy, China will focus on supporting the development of new energy vehicles and digital new infrastructure, and is committed to improving the supply capacity of domestic advanced chemical materials. During the "14th Five-Year Plan" period, the theme of the chemical industry is to promote high-quality development, focusing on achieving green, low-carbon, and digital transformation. Encourage the development of advanced chemical materials, including high-end polyolefin, special engineering plastics, biodegradable materials.

Although technological progress is crucial, market demand is still the main driving force for the development of the industry. The high-end material industry will gradually shift from Japan, South Korea, Taiwan and other places to mainland China. In the next few years, the chemical industry may enter a short-term boom cycle, and the sustainability of this cycle will depend on the implementation of relevant policies in China and the United States.

China's chemical industry will usher in a wave of de capacity, especially in the field of bulk chemicals. In the next three years, more R & D-driven companies will emerge; in the next 3-5 years, the global layout and domestic substitution will further intensify, and foreign-funded companies may also enter China more. For China's chemical companies, collaborative development and cooperation are always important.

China's chemical industry is one of the most complex, and the industrial structure and policies are constantly changing. While pursuing development, enterprises need to constantly update their understanding of the industry and their ability to seize the opportunity.