1. China's ethylene production capacity concentrated on the ground, million tons of plant into the industry standard.
In 2026, china ethylene industry ushered in a large-scale production capacity launch cycle, many million tons of ethylene projects concentrated into the EIA, equipment installation, linkage test run and production stage. The current industry new projects have been fully popularized million tons of scale, old small capacity accelerated iteration. among them, china Xinjiang Dushanzi Tarim Phase II 1.2 million tons/year ethylene, china Fujian Zhongsha Gu Lei 1.5 million tons/year ethylene, china Liaoning Huajin Ami 1.65 million tons/year ethylene it has entered the critical stage of feeding, commissioning and trial start-up; china Lanzhou Petrochemical, Maoming Petrochemical, CNOOC and Shell Huizhou Phase III and other projects to steadily advance construction; china Jiangsu Blue Sea Tongzhou Bay, Dalian Petrochemical, Yueyang Refining & Chemical such projects are in the preparatory stage and have made substantial progress during the year. This round of centralized production expansion completely reshape China and the global ethylene supply pattern.
2. supply and demand are seriously mismatched, and the industry starts a long-term downward cycle.
The pace of this round of capacity delivery far exceeds the growth rate of terminal demand, forming a significant supply and demand scissors gap. By the end of 2025 china the total production capacity of ethylene is close to 63 million tons, and the total volume of 13 new domestic projects in 2026 is 8.52 million tons. The total production capacity at the end of the year is expected to exceed 70 million tons, and the industry operating rate will fall back to 76%-85%. Demand-side growth is weak, with domestic ethylene consumption of 68.51 million tons in 2025, up 7% YoY, consumption rising only slightly to 71 million tons in 2026, and annual demand growth of less than 3 million tons.
In terms of the global landscape, a net new global ethylene production capacity of 14.6 million tonnes in 2026, china's production capacity accounted for up to 56%, is the core main force of global new supply. The concentrated release of production capacity led to the intensification of the internal volume of general PE and PP tracks, and the high value-added tracks such as POE and EVA also ushered in a concentrated expansion of production, and the dividends of high-end materials faded rapidly. At the same time, the domestic old inefficient production capacity out of the rhythm lag, further amplification of the stage of excess pressure, the industry may usher in more than 5 years of downward adjustment cycle.
Under the background of the downward 3. cycle, three types of projects have the advantage of anti-risk.
The industry differentiation pattern continues to intensify, not all new capacity is under pressure, three types of projects have significant cyclical risk resistance. One is china Coastal Light Hydrocarbon Cracking Project to Jiangsu Blue Sea Tongzhou Bay plant as a representative, ethane, LPG raw material route cost advantages outstanding, in the industry trough can still maintain stable income, significantly better than the traditional oil plant. The second is a differentiated high-end new material project, china Huizhou CNOOC Shell Phase III fujian Gulei project focuses on alpha-olefins, PAO, PC, POE and other high-end categories, relying on certification barriers to avoid general-purpose red sea competition. The third is the domestic old plant "oil reduction and increase" transformation project, Lanzhou Petrochemical, Maoming Petrochemical and other bases through the shutdown of old equipment, optimize the production capacity structure, supporting energy-saving carbon reduction process, to achieve capacity upgrading. Conventional projects that replicate only the generic polyolefin portfolio are likely to face the dilemma of being put into production and under pressure.
Reconstruction of Talent Structure under 4. Industry Cycle
along with industrial upgrading and cycle adjustment, the value of industry talents ushered in the reconstruction. Process and technical personnel for light hydrocarbon cracking optimization, carbon recovery and plant energy consumption control, high-end brand development and application personnel such as POE, EVA and metallocene materials, as well as compound management personnel for refining and chemical digitization, carbon footprint accounting and transformation of old factories continue to expand. Salary and scarcity are significantly higher than those of traditional plant operation positions, becoming the core elements supporting enterprises to cross the cycle.
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