Employees check equipment at a petrochemical plant in Lianyungang, Jiangsu province.[SI WEI/FOR CHINA DAILY]
China's petrochemical industry is expecting to bolster profits this year, marking a key turning point after a period of challenges, said industry experts.
The petrochemical sector's revenue rose to 16.28 trillion yuan ($2.24 trillion) last year, up 2.1 percent year-on-year amid an intricate landscape, laying the groundwork for robust prospects in 2025, said Fu Xiangsheng, vice-president of the China Petroleum and Chemical Industry Association, during a news conference in Beijing on Thursday.
China's petrochemical industry bottomed out and stabilized last year, and is on track for recovery, driven by a rebound in global oil prices, rising domestic demand and strong government support, he said.
The association said China's petrochemical sector has contributed substantially in the past few years to both domestic energy security as well as food security, with increased output of refined oil products, fertilizers and pesticides.
Although the trade situation is still challenging, with numerous obstacles, trade frictions, and uncertainties, demand potential for China's petrochemical products in international markets remains significant, Fu said.
High energy prices in Europe, for example, have created numerous opportunities for Chinese petrochemical products to expand into global markets, he said.
The chemical industry worldwide faces structural shortages in high-end products represented by new chemical materials and high-end fine chemicals.
Chinese oil refiners and petrochemical companies, including State-owned oil giant China Petroleum and Chemical Corp, or Sinopec, as well as China National Petroleum Corp and China National Offshore Oil Corp, are already making strides in the global market with technological advances and advantages in supply chains, eyeing greater market share from growing demand for energy transition technologies.
The companies are stepping up innovation efforts, focusing on high-end chemical products and specialty materials, a shift that is not only helping these firms differentiate themselves in global markets but also driving profit margins higher, positioning Chinese companies in greater-value segments of the global petrochemical market.
Analysts said Chinese petrochemical firms' pivot to high-end chemicals will be one of the primary reasons for their improved profit prospects in 2025.
"By focusing on advanced materials and specialty chemicals, Chinese companies are capturing demand in sectors with higher margins," said Lin Boqiang, head of the China Institute for Studies in Energy Policy at Xiamen University.
"The shift is both a response to the growing global preference for sustainable and high-performance products and a way to ensure better returns amid increased competition," he said.
"While international competition is intensifying as other petrochemical-producing nations ramp up their sustainability efforts and technological innovations, China's comprehensive industrial system, vast market size and ongoing investments in innovation and infrastructure provide a strong competitive advantage."
China's petrochemical industry has been increasingly investing in green technologies and circular economy practices, with companies making strides in producing green chemicals and low-carbon alternatives to traditional petrochemical products, in line with the nation's broader environmental goals and the international push toward reducing carbon emissions, said Fu of the China Petroleum and Chemical Industry Association.
He emphasized that one of the significant advantages for China's petrochemical industry is its massive domestic market, which provides a strong foundation for growth.
"China is not only the world's largest consumer of petrochemical products but also a critical hub for global supply chains. The large market volume, coupled with the country's comprehensive industrial system, is a key factor supporting the industry's resilience," he said.
Moreover, the Belt and Road Initiative has also opened up new opportunities for Chinese petrochemical firms to expand into emerging markets. By establishing joint ventures and forming strategic partnerships in regions such as Southeast Asia, Africa and Latin America, Chinese companies are securing new revenue streams, he added.
"The country's vast domestic market, robust industrial infrastructure and integrated supply chain further strengthen its competitive position in the global petrochemical market. As China adapts to the global energy transition, its petrochemical industry is expected to emerge as a more sustainable, innovative and globally integrated powerhouse."
