Chemical "anti-roll" first year: phenolic ketone industry differentiation intensified, who is the winner?

1. Industry Policy Environment and Development Background

Industrial Structure Adjustment Policy Core Logic

China's chemical industry is undergoing deep structural adjustment, the government has launched a series of industrial upgrading policies aimed at solving the problems of excessive competition and overcapacity. The core goal of this policy orientation is to promote the industry from low-price competition to high-quality development by regulating market order and eliminating backward production capacity.

The background of

policy formulation stems from the long-standing structural problems of China's chemical industry: excessive competition among enterprises leads to frequent price wars, inefficient resource allocation and increased pressure on environmental protection. To this end, the central government has made it clear in many important meetings that it is necessary to "comprehensively rectify excessive competition" and get rid of local protectionism and market segmentation.

policy implementation of the dual mechanism

Supply-side optimization mechanism of

• Administrative guidance: The Ministry of Industry and Information Technology and other ministries jointly promote the evaluation of old installations, through the "Industrial Structure Adjustment Guidance Catalog" and other policy documents to clarify the backward production capacity elimination standards
.
• Market regulation: encourage industry self-discipline, through inter-enterprise coordination to reduce production and other market-oriented means to optimize the supply and demand balance

Effect differentiation characteristics of

Policy effects vary by industry characteristics:

• High operating rate industry: idle capacity is less, in demand growth and industry self-regulation, fundamental pressure will be significantly eased
• High concentration industry: fewer participants, low coordination costs, production reduction supervision difficult, policy effect is more significant
• Decentralized industry: many enterprises, opinions are difficult to unify, policy implementation effect is relatively limited

2. Phenol Ketone Industry Status Analysis

Capacity rapid expansion trend

China's phenol ketone industry has maintained rapid growth in recent years:

• Long-term growth: a compound growth rate of 13.65 per cent
over the past decade
• Recent acceleration: the last five years compound growth rate of up to 16.01 percent
• Key nodes :2023 new production capacity concentrated release, the annual growth rate of 51%, the total production capacity exceeded 10 million tons, reaching 10.23 million tons/year
• Current scale: as of the first half of 2025, the domestic phenol ketone production capacity has reached 10.48 million tons/year

The rapid expansion of

production capacity has brought significant supply pressure, with some units experiencing long-cycle shutdowns and an increase in temporary shutdowns due to lack of profitability.

Capacity structure characteristics

Old production capacity is relatively low in

• Operation of 20 years of phenol ketone plant capacity of only 790000 tons, accounting for 7.54 of the total capacity.
• These old units are small scale units (<300000 tons/year)
• At present, except for the Bluestar Harbin device, the rest of the old devices have been shut down
.
• Yanshan Petrochemical and Jilin Petrochemical plant has no restart plan, since 2025 June from the total production capacity excluded

Product price differentiation phenomenon

the phenol price support factors

• Supply side tightening: the main device centralized maintenance, July Wanhua Chemical, Shanghai Xisa, Sinopec Mitsui and other devices parking maintenance
• Inventory is low: Jiangyin terminal inventory continues to be less than 10000 tons, supply is tight
.
• Export Demand: Overseas Orders Increase, Reduce Domestic Supply

acetone price pressure reasons

• Inventory high: Jiangyin Port acetone inventory reached 25500 tons, higher than the annual average
• Supply and demand mismatch: domestic trade concentrated arrival and downstream scattered pick-up to form a contradiction
• Weak demand: downstream product demand failed to form synchronous growth

3. 2025 supply and demand pattern outlook

New capacity continues to be put in

2025 is still the year of production of phenol ketone:

• Growth: Expected capacity growth of 10.70 percent
• New devices: four sets of devices are planned to be put into production, of which Fuyu Chemical has been successfully put into production
in the first half of the year.
• Second half of the production capacity: Zhenhai refining and chemical, Jilin Petrochemical, Rui Lin Petrochemical total new 1.35 million tons of production capacity
.

Capacity Adjustment Process

Exit capacity 

• CNOOC, Huizhou Zhongxin I, Gaoqiao Petrochemical and other devices may be long-term shutdown
.
• The total withdrawal capacity is about 890000 tons.

Net additional capacity of

:

• New 1.35 million tons and exit 890000 tons to form a hedge
• Net production capacity of about 460000 tons, market supply pressure still exists

4. Policy Impact Analysis

Differentiation Impact on Phenolic Ketone Industry

Policy impact characteristics:

1. Forced clearance effect is limited: old production capacity accounted for only 7.54 per cent, and most have been parked, the policy on the actual supply impact is small
2. Structural problems stand out: overcapacity and disorderly competition coexist, new capacity may increase market pressure
3. Long -term adjustment orientation: the industry will enter the long-cycle supply-side optimization adjustment stage
.

Market mechanism role highlights

, due to the relatively low proportion of old production capacity, supply optimization relies more on spontaneous market regulation:

• Policy role to long-term industrial upgrading guidance
• Enterprises need to replace price competition
through technology upgrading and large-scale cost reduction.
• Promote the industry from "price competition" to "quality and innovation competition"

5. future development prospects

Industry Transformation Direction

The phenol and ketone industry is in a critical period of structural adjustment. Although the new capacity will still bring supply pressure in the short term, the industry is expected to realize the transformation from "low-price competition" to "high-quality development" under the promotion of policies.

Competitive landscape reshaping

the long-term trend:

• With technical advantages and scale effect of enterprises will occupy a favorable position
• Industry overall profitability is expected to improve
• Market concentration may further increase

Key Concerns

Investors should focus on:

• Supply and demand pattern change trend
• Technological innovation progress
• Head enterprise competitive advantage construction
• Policy rules landing effect
• Industry independent adjustment process

The key to the successful transformation of the

industry lies in the organic combination of the effect of policy implementation and the ability of enterprises to adjust independently.