[Industry Focus]：There are more than 300 chemical projects under construction in Shandong Province. What are the main construction directions?

As the largest gathering place of chemical enterprises in China, Shandong Province not only has many local oil refining enterprises and private chemical enterprises, but also occupies an important position in the national and even global chemical industry. According to the statistics of 2023, the number of chemical projects under construction in Shandong Province exceeds 300, ranking first in the country. This paper will focus on the analysis of the current situation and prospects of chemical projects under construction in Shandong Province.

China's chemical industry is developing rapidly, and the number of chemical projects under construction is rising. According to statistics, as of the end of December 2023, nearly 2000 chemical projects are planned to be under construction nationwide. Among them, Shandong Province, as the largest gathering place of chemical enterprises in China, has the largest number of chemical projects under construction, more than 300. Jiangsu Province and Zhejiang Province ranked second and third respectively, with 190 and 170 projects under construction.

The development momentum of chemical industry in Shandong Province is strong. There are not only many local oil refining enterprises and private chemical enterprises, but also a large amount of investment in new materials, new energy and other fields. According to the provincial key chemical project data released by Shandong Province in 2023, the number of key chemical projects in Shandong Province in that year was 78. If we add the bulk chemical projects under preparation, the number of chemical projects under construction in Shandong Province will exceed 400 in the future, and continue to maintain the leading position in the country.

among the chemical projects to be under construction, bulk chemicals account for the largest number, including styrene, propylene oxide, propylene glycol, propylene, polypropylene, epoxy resin, caustic soda, pure benzene, polyethylene, ethylene, MMA and xylene. These bulk chemicals will help fill the missing link in the industrial chain from oil refining to fine chemicals, and promote the healthy development of the chemical industry in Shandong Province.

However, the past development ideas of Shandong's chemical industry mainly revolved around oil refining, which limited the development of its industrial chain. In order to improve the refinement rate of the chemical industry, Shandong Province needs to change its development thinking. Starting from 2021, refining development control has become a trend, which has prompted many refiners to change their thinking and look for new development directions.

In the future, the development of chemical industry in Shandong Province should focus on making up the missing link from oil refining to fine chemical industry chain. By investing in the construction of bulk chemicals, companies can make up for the missing links in the industrial chain and promote the healthy development of the chemical industry. This development idea is an important choice to make up for the lack of early development, and it is also a key step to promote the transformation and upgrading of the chemical industry in Shandong Province.

shandong Province in the next few years, propylene oxide will become the key development of chemical varieties. Among the many chemical projects to be under construction, the number of propylene oxide exceeds 10 sets, and the scale has reached an astonishing 3.4 million tons/year. This data shows that Shandong Province attaches great importance to propylene oxide and investment in the chemical industry.

Shandong Province has many investment projects in the field of propylene oxide, including Wanhua Chemical's 800000-ton/year project, Jiangsu Sanmu Group's 450000-ton/year project, and Shandong Binhua New Materials Company's 540000-ton/year project. These enterprises not only effectively extend the industrial chain of propylene by-product of local oil refining enterprises in Shandong Province, but also supplement the market gap after the elimination of propylene oxide by chlorohydrin method. More importantly, these companies have seen the huge potential of the downstream new energy-related product market of propylene oxide, and have laid out the extension of the propylene oxide industry chain.

However, although these companies have made large-scale investments in the field of propylene oxide, the actual market demand and development space are limited. At present, the supply of propylene oxide market has appeared surplus situation, the future of this situation may be more serious. Therefore, for the existing and planned propylene oxide project enterprises in Shandong Province, how to deal with market changes and competition, and how to improve the quality and added value of products will be an important test they face.

according to statistics, the number and scale of chemical projects under construction in the field of styrene and propylene glycol in Shandong Province are quite large. Specifically, there are 4 sets of styrene projects under construction in Shandong Province, with a total scale of more than 1.1 million tons/year; while there are 6 sets of propylene glycol projects with a planned scale of more than 700000 tons/year. These two bulk chemicals account for a considerable proportion of chemical projects in Shandong Province.

First of all, the construction of styrene project mainly comes from refining enterprises by-product carbon eight and ethylbenzene industrial chain fine chemical extension. This extension makes full use of the by-products in the refining process, realizes the effective use of resources, and also promotes the development of the styrene industry. It is worth mentioning that the styrene projects to be under construction in Shandong Province all use non-ethylene processes, which further highlights the use of refining by-products for downstream extension.

On the other hand, the construction of propylene glycol project is the main embodiment of the extension of the downstream industrial chain of propylene oxide. With the increase of propylene oxide projects, the production of its downstream product propylene glycol has also been promoted accordingly. Most of these new propylene glycol projects are aimed at producing products such as unsaturated resins and elastomeric polyethers, which undoubtedly increases the supply pressure of propylene oxide, propylene glycol and unsaturated resin industry chain.

According to the analysis of the nature of key chemical projects in Shandong Province in 2023, about 49% of the projects are new material products, 36% are fine chemicals, and only 15% are bulk chemicals. In these new material projects, most of them are related to new energy, such as lithium battery separator materials, new energy automobile materials, battery packaging materials, etc.

This shows that chemical companies in Shandong Province are actively seeking new energy-related product development to comply with industry trends. However, due to the existing characteristics of the chemical industry chain in Shandong Province, there may be a gap in the connection between new energy-related products and the existing chemical industry chain. This may lead to the province's chemical industry can not form a complete industrial chain structure, thus bringing challenges to enterprises.

Therefore, under the development trend of fine chemicals and new materials industry in Shandong Province, basic raw material products are still one of the important outsourcing raw materials in Shandong Province, which may exist for a long time.

Source: Chemical Flathead Brother

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