China's Chemical Industry Concentration Crosses Critical Value: 40% Category CR4 Exceeds 50%,"Price War" Era Ends

According to the public data of CITIC Securities, CICC, changjiang securities and Petrochemical Federation, among the 118 mainstream chemical sub-categories counted, the number of categories with CR4 capacity concentration exceeding 50% in China's chemical industry in 2025 accounted for nearly 40%, involving core fields such as basic chemical industry, new materials, chemical fiber, polyurethane, fluorine chemical industry and coal chemical industry. This data marks a historic turning point in the transformation of China's chemical industry from "decentralized competition" to "oligopoly pattern.

What is the concept of 50%: Understanding this critical threshold

according to the Bain classification of industrial economics, CR4 less than 40% is a competitive market, with many enterprises, scattered shares and dominated by price wars. 40% to 60% are oligopoly competition, the leader starts to control the field, and the supply elasticity decreases. More than 60% are highly oligopoly, oligopoly, strong pricing power and high profit center. 50% is the core node of this transformation-crossing this threshold, the market has changed from "no one is satisfied" to "a few people have the final say", and the rules of the industry game have begun to change.

At present, the representative category data that have crossed the critical value are clear: about 85% of MDI industry Wanhua, BASF, Covestro and Huntsman CR4; Spandex CR4 is about 70%; Silicone CR4 exceeds 65%; The third generation refrigerant and PTA are both close to 60%. Titanium dioxide exceeds 44%. Most of these categories are the core intermediate products of the chemical industry chain, which are typical representatives of the large-scale expansion of China's chemical industry in the past.

Three Forces in One Drive Concentration Leaps

the significant increase in concentration is not accidental, but the inevitable result of the resonance of the triple forces of policy, capital and market.

At the policy level, China continues to strictly control the "two highs" project. The Action Plan for Renewal and Renovation of Old Devices in Petrochemical and Chemical Industry (2026-2029) clearly requires the registration and classified disposal of devices that have been put into operation for more than 20 years. The renovation and withdrawal of old devices in stock will be completed by 2029. The high energy consumption capacity will be cleared out in an orderly manner to make market space for the leader. At the capital level, leading enterprises are more likely to obtain local government support than small and medium-sized enterprises, and by virtue of their financial strength to achieve a share increase through technological transformation and expansion, policy tightening happens to be a window period for accelerated concentration. At the market level, the price war has long suppressed industry profits, high-cost small and medium-sized production capacity in compliance pressure and cost constraints to accelerate the exit, the leader through survival competition naturally complete the market share increase.

Competition Logic Switch: From "Price War" to "Value Competition"

concentration breaks through the critical value, which means that the underlying competitive logic of the chemical market is switching. In the past, the homogenization of products was serious, and price war was the most effective means of competition. When CR4 breaks through 50%, the leader has the pricing power, and the focus of competition will move to three directions: product segmentation differentiation and high-end, technical barrier construction and integrated cost reduction, green and low-carbon transformation and service system improvement.

For overseas traders and supply chain practitioners, the impact is direct and far-reaching: the pricing power of highly concentrated categories is concentrated on the production side, and the bargaining space of purchasers continues to narrow; middlemen need to shift from "spread arbitrage" to "service value-added", relying on channels, logistics and technical services to build differentiated competitiveness. In already highly concentrated categories such as MDI, spandex, and silicone, this trend is a reality rather than a prediction.

The future pattern: oligarchic ecology accelerates the formation

high energy-consuming, low-tech, non-branded small and medium-sized production capacity will be accelerated under the triple squeeze of compliance pressure, cost constraints and market competition. The final pattern will move towards the "oligarch + supporting" ecology: leading enterprises to master pricing power and technical barriers, small and medium-sized enterprises or transformation into specialized new supporting business, or exit in the clearing, the industry as a whole will be in the capacity utilization rate recovery, profit center rise on the healthy track to accelerate forward.