China Jiangsu Lianyungang Satellite Chemical 20.7 billion Yuan Propylene and Downstream High-end New Materials Project Landed

1、 Project Overview

on November 12, Satellite Chemistry issued an announcement. On November 11, the company signed an investment cooperation agreement with the Management Committee of the National East, Central and Western Regional Cooperation Demonstration Zone (Lianyungang Xuwei New District). It plans to establish a project company with a total investment of about 20.7 billion yuan. Propylene and downstream high-end new materials projects, of which the first phase investment is 12 billion yuan, and the source of funds is self-owned or self-raised. The project is located in Xuwei New District, Lianyungang, Jiangsu, China, covering an area of about 1146 mu. The land is industrial land and will be implemented in two phases as a whole. The project plans to produce 1 million tons/year for the first and second phases of propane dehydrogenation (PDH), totaling 2 million tons/year; 300000 tons/year for the first and second phases of acrylic acid, totaling 600000 tons/year; butyl acrylate is only planned for the first phase 300000 tons/year; and 800000 tons/year for the first and second phases of polyhydric alcohol, totaling 1.6 million tons/year. The construction period of the first phase of simultaneous supporting public works shall not exceed 3 years, and the start-up time of the second phase will be flexibly arranged in combination with the operating efficiency of the first phase and the market situation. When the project is completed, a complete capacity matrix of PDH, acrylic acid, butyl acrylate and polyalcohol will be formed.

2、 Interpretation of Industrial Chain Layout and Market Impact

PDH route relies on propane raw materials to produce propylene, acrylic acid, butyl acrylate is the core monomer in the field of coatings, adhesives, sanitary products, multi-carbon alcohol belongs to high value-added fine chemical raw materials. China Lianyungang Xuwei New District itself is a national-level port petrochemical base, the port advantage adaptation PDH device relies on imported propane raw material structure. Satellite Chemistry has already operated a mature C2 ethylene industry chain factory in the local area. This new C3 project can share supporting resources such as port logistics and park public works, realize the synergy and complementarity of C2 and C 150.00g light hydrocarbon industry chains, and upgrade from a single ethylene route to a C2 C3 integrated industrial platform. The layout of the integrated device can realize the mutual supply of internal materials, reduce the cost of intermediate trade circulation, and hedge the price fluctuation risk of propylene and acrylate. From the perspective of overseas chemical traders and producers, the project will enhance the supply elasticity of acrylic acid, butyl acrylate and polycarbon alcohol in East China, and is expected to release a stable incremental supply in the long term. However, there is uncertainty about the timing of the second phase of production, and the short-term disturbance to the market is limited. The project will promote the upgrading of products to high-end new materials, and will also change the supply pattern of acrylic esters in East China and intensify the competition between domestic and track enterprises.