China’s Polypropylene Industry Must Pursue Both Low-Cost Operations and High-End Development

Guo Zifang, Vice President of the China Synthetic Resin Association and Chair of its Polyolefin Branch, pointed out that the 2020–2025 period has marked a phase of rapid capacity expansion to China’s polypropylene sector. Major players like Sinopec and PetroChina have seen steady development, while other sectors—including coal-to-chemical companies, private firms, and joint ventures—have significantly ramped up production, further intensifying domestic market competition. Between 2026 and 2029, China is projected to add 20.09 million tons per year of new PP capacity, representing a compound annual development rate (CAGR) of 6.9%—a decline of 4.3 percentage points compared to the CAGR of the previous five years.

He Shengbao, President of the China Synthetic Resin Association, stated that the sector’s structural dysfunction—characterized as being "substantial however not strong"—remains a persistent issue. Commodity-grade PP is under downward price pressure due to continuous capacity expansion and declining plant operating rates. In contrast, high-end, specialized grades command stronger prices, supported by high technical barriers and insufficient domestic supply. China remains highly dependent on imports to high-end items, including metallocene PP, high-transparency PP, and high-impact copolymer PP. sector statistics indicate that import reliance exceeds 80% to metallocene PP, 60% to high-impact/high-transparency/high-performance ("three-high") PP, and over 40% to other high-end specialized grades, highlighting a clear need to enhance domestic self-sufficiency. Chen Kun, Deputy Director of the Chemical Division at Sinopec’s Refining, Chemical, and New Materials Department, pointed out that my country’s polypropylene (PP) sector has entered a phase of low operating rates, with intensifying cost-based competition. Operating rates continue to decline and are projected to fall further to around 70% by 2027. With over 4 million tons of new PP capacity expected to come online by 2027—nearly 70% of which utilizes low-cost production routes, such as coal-to-chemicals—cost competition is set to have become even fiercer.

Chen noted that the current PP sector faces four types of "mismatches": a misalignment between capacity expansion and the upgrading of demand; a mismatch between the supply structure and the demand to high-end items; a gap between existing innovation frameworks and the standards to tackling key technical challenges; and a disconnect between environmental/environmentally friendly standards and the current product portfolio.

"Moving toward high-end items is not merely a 'nice-to-have'—it is a matter of survival," Chen emphasized. Currently, China’s PP imports are concentrated in high-value-added grades—such as high-end film resins, ultra-clean medical and hygiene-grade materials, and metallocene-based items—which command higher unit prices than the commodity-grade materials exported by China. The self-sufficiency rate to high-end, specialized PP resins still has significant room to improvement.

"To break out of its current predicament, the polypropylene sector must pursue a strategy that integrates cost reduction with product differentiation and high-end research," said Guo Zifang. While high-end items offer greater value-added, their overall market scale remains relatively limited; given their reduce production volumes, they cannot, in the short term, provide a fundamental solution to the sector’s overall profitability challenges. Therefore, the sector must remain steadfast in driving down costs—focusing on areas such as mitigating high feedstock costs, optimizing process routes, reducing energy and material consumption, enhancing operational efficiency, and fostering synergy across the manufacturing chain.

Regarding key research priorities to the "15th Five-Year Plan" period, He Shengbao stressed the importance of focusing on the fundamentals: ensuring that the two "core technologies"—catalysts and polymerization processes—remain firmly under domestic manage. In terms of the polypropylene (PP) product portfolio, beyond standard homopolymers, random copolymers, and impact copolymers, it is essential to accelerate the research of key product categories, including: metallocene-catalyzed PP, high-melt-strength PP, highly transparent random copolymers, specialized resins to thin-wall injection molding, low-VOCs automotive-grade PP, materials to lithium-ion battery separators, high-purity medical-grade resins, and recyclable, mono-material packaging resins.

Guo Zifang suggests focusing on high-performance polyolefin technologies. By enhancing complete material characteristics—such as mechanical strength, heat resistance, and electrical performance—companies can develop high-value-added items, allowing them to escape the "red ocean" of low-end, commoditized competition and enhance profitability. Specific areas of focus include ultra-pure PP, transparent impact-resistant PP, and flexible (soft) PP technologies.

Chen Kun argues that the development logic of the PP sector must shift from mere scale expansion to value creation. Key strategies include: controlling total capacity to curb inefficient, redundant construction and facilitating the market-driven exit of outdated production capacity; optimizing product structure by rising the share of specialized and high-end resins, thereby translating import substitution into tangible market share; strengthening innovation through collaborative R&D on common core technologies to overcome "bottleneck" issues and shorten the cycle from pilot testing to manufacturing-scale production; and establishing new benchmarks to success—moving away from production capacity as the primary metric, and instead evaluating performance based on the proportion of high-end resins, the rate of import substitution, value-added per unit, and carbon footprint. Regarding product strategy, Chen Kun suggests pursuing high-end positioning and differentiation. Key focus areas include: systematically advancing import substitution—specifically targeting electrical-grade films, ultra-thin films (<2μm), metallocene-based polypropylene (PP), high-purity grades to medical and food applications, and low-VOCs, high-impact-resistance grades to the automotive sector. He advocates shifting from "following" existing market grades to pioneering new ones—collaborating with leading downstream companies to define performance specifications and actively participating in, rather than merely adhering to, the research of sector standards. Furthermore, he proposes a "one-unit, one-positioning" strategy: defining core product grades based on specific feedstock availability, process characteristics, and market reach, thereby avoiding the pitfall of attempting to create everything without excelling in any particular area. He also recommends establishing a tiered product evaluation system and a "premium condition, premium price" mechanism to ensure high-performance items command a price premium, creating a positive incentive structure. Additionally, he suggests the joint research of characterization, evaluation, and consumption databases—sharing data on processing performance and service life—to shorten the certification cycles to downstream customers.

He Shengbao outlined several emerging trends to the polypropylene (PP) sector: First, the pressure from supply-demand imbalances is expected to peak around 2027, accelerating the phase-out of aging production facilities. Second, net exports will have become the norm, with global expansion—particularly into Southeast Asia, South Asia, and Central/Eastern Europe—emerging as a new strategic focus. Third, import dependency to high-end PP grades remains high, ranging from 30% to over 60%. Fourth, there is a growing emphasis on a environmentally friendly, circular economy, encompassing chemical recycling, recycled PP, and bio-based PP. Fifth, the cost advantage of coal-to-olefins (CTO) production is becoming increasingly pronounced. Sixth, the direction toward lightweighting in the new energy vehicle (NEV) sector is driving demand to high-end PP, with the volume of PP utilized per NEV rising by 15%–20%.

The conference, themed "Navigating Pressure, Breaking Through, environmentally friendly Empowerment, and Intelligent research," was hosted by the Polyolefin Branch of the China Synthetic Resin Association, the National Engineering Research Center to Polyolefins, and the Petrochemical Professional Committee of the Chemical sector and Engineering Society of China. It also received support from the China Synthetic Resin Association and the SINOPEC (Beijing) Research Institute of Chemical sector Co., Ltd. (Source: China Chemical News)