[Industry Focus]：China's POE industry ushered in blowout development: opportunities and challenges coexist

Recently, Dongying Port Economic Development Zone publicized the social stability risk analysis information of the green low-carbon polymer new material project (high-end chain extension project) of Yatong Chemical (Shandong) Co., Ltd. Among them, Yatong Chemical plans to build 2*100000 tons of POE project, which marks that China's POE industry has entered a new stage of development. With the breakthrough of the localization of the Beo billion POE project, a number of POE projects have been publicized and made phased progress, and new enterprises have been pouring into this field. However, the opportunities and challenges behind this cannot be ignored.

According to statistics, as of the end of December 2023, China has only achieved industrial production of 30000 tons/year POE plants in Beiou, and the rest are pilot projects, with a total production scale of about 36000 tons/year. However, the scale of the proposed projects under construction is huge and is expected to show a blowout development in the next few years. Especially by 2030, the total scale of POE devices under construction in China will exceed 4.5 million tons/year, of which eight-carbon POE dominates, with the proposed scale under construction approaching 7 million tons/year, while the proposed scale of four-carbon POE and six-carbon POE is relatively small.

1. Market expansion and cost reduction: with the acceleration of POE localization process, production costs are expected to drop significantly, which will not only reduce the cost burden of downstream enterprises, but also promote the application of POE in more fields. In the past, because POE mostly relied on imports, the pricing power was in the hands of international companies, resulting in higher costs for consumer companies downstream of China's POE. After localization, the market pricing system will be tilted towards domestic enterprises, which is expected to promote a significant reduction in the price level of POE and further stimulate market demand.

2.PE high-end brand supply growth and industrial upgrading: the blending modification of POE and PE can significantly improve the material properties of PE, such as strength, impact resistance and toughness, so that PE can obtain opportunities in more high-end applications. With the increase of POE production, the supply of high-end PE brands will also increase, which will help to repair the imbalance between supply and demand in the PE market and promote the upgrading of the entire PE industry chain. In addition, the wide application of POE will also promote the coordinated development of related industrial chains, such as film, photovoltaic and other fields, and further promote the overall progress of China's new materials industry.

3. Innovation and promotion of photovoltaic industry: the application of POE in the field of photovoltaic sealing film has unique advantages, such as better anti-PID (potential induced attenuation) effect and water blocking performance, so that it has a wide range of applications in the environment such as water surface power stations. With the development of the POE industry, its application in the photovoltaic industry will accelerate and provide strong support for the development of double-sided photovoltaic panels. This will not only improve the performance and safety of photovoltaic modules, but also promote the overall innovation and progress of the photovoltaic industry.

increased market competition: with the commissioning of the proposed projects under construction, the supply of POE industry will increase significantly and the market competition will become more intense. This may lead to low-cost strategies for companies to compete for market share, further compressing profit margins. In addition, international companies may also increase their investment in the Chinese market and compete with domestic companies, further intensifying market competition.

2. Withdrawal of some enterprises: under the dual pressure of intensified market competition and falling prices, some enterprises under construction may not be able to withstand the pressure and withdraw from the market. This will lead to an imbalance in the development of the industry, and part of the production capacity will not be fully utilized, which will have a certain impact on the healthy development of the entire industry.

3. Technical threshold and quality control: the production of POE involves high-end technology and strict quality control requirements. New entrants not only need to have advanced production technology and equipment, but also need to establish a sound quality management system to ensure stable and reliable product quality. This is a huge challenge for some enterprises with weak technical strength. At the same time, with the increase of production capacity, how to ensure the consistency and stability of product quality is also a problem that needs to be paid attention to in the process of industrial development.

The blowout development of China's POE industry has brought unprecedented opportunities and challenges to enterprises. Facing the intensification of market competition and the reduction of cost pressure, enterprises need to constantly innovate and improve their technical level to adapt to market changes and seize development opportunities. At the same time, the government and enterprises should work together to strengthen industrial planning and policy guidance to ensure the healthy and sustainable development of the industry.