Overview - Ethylene is one of the largest chemical products globally, accounting for over 75% of petrochemical products, and plays a crucial role in the national economy [1][12] - In 2023, China's apparent ethylene consumption reached 36.104 million tons, a year-on-year increase of 16.88%. However, in 2024, growth is expected to slow down to 2.70%, with an apparent consumption of 37.08 million tons [1][12] Industry Background - The Chinese government has implemented policies to encourage deep processing of crude oil and expand import channels, promoting the "base, park, and integration" development of the ethylene industry [6] - Environmental protection policies are being enforced to limit emissions and pollution, which may increase short-term operational costs but will drive the industry towards a greener, low-carbon transformation in the long run [6] Production Process - Major ethylene production methods include steam cracking, catalytic cracking, ethane cracking, and coal-to-olefins (MTO/MTP) [4] - Steam cracking remains the primary method globally, while coal-to-olefins technology is unique to China, addressing the country's resource constraints [4] Supply Chain - Ethylene production relies on raw materials such as naphtha, ethane, propane, and coal, with naphtha being the primary feedstock in China [8] - Ethylene is a key organic chemical raw material used to produce polyethylene (PE), ethylene glycol (EG), and other essential chemicals [8] Market Demand - Polyethylene (PE) is the main downstream product of ethylene, accounting for over 60% of consumption, with production capacity expected to reach 35.71 million tons in 2024 [10] - The rapid growth in downstream industries such as packaging, agriculture, and automotive is driving demand for ethylene and its derivatives [6][12] Competitive Landscape - The ethylene industry in China is evolving from a state-owned enterprise-dominated market to a more competitive landscape with the entry of private and foreign companies [18] - In 2024, state-owned enterprises like Sinopec and PetroChina are expected to account for 63.32% of the total ethylene production in China [18] Key Players - Sinopec is projected to produce 13.47 million tons of ethylene in 2024, representing 38.5% of the national total [20] - PetroChina's ethylene production is expected to reach 8.652 million tons in 2024, a year-on-year increase of 8.1%, accounting for 24.8% of the national total [22] Future Trends - Ethylene production capacity is expected to continue growing in the next 2-3 years, with a total of 25.75 million tons per year currently under construction [16] - The industry will focus on adopting environmentally friendly technologies and reducing reliance on fossil fuels, driven by stricter environmental regulations [24]