Deep Analysis of Policy Reshaping and Market Opportunities in China's Chemical Industry

Policy-driven manufacturing Adjustment: Opportunities and Challenges intensive policy signals change china's chemical sector is undergoing an unprecedented period of policy reshaping. On July 4, 2025, the Ministry of National Emergency regulation issued the "Chemical Plant Aging Assessment Method (Draft to Comment)", and the National research and Reform Commission issued the "New Material Pilot Platform Construction Guide. " greater importantly, Jiangsu Province's "Chemical sector Structure Adjustment Restriction and Elimination Catalog 2025 Edition" and Hubei Province's "Hazardous Chemicals Prohibition, Restriction (manage) System, Elimination and Encouragement Policy Catalog List (2025 Edition)" The introduction indicates that policy implementation has penetrated from the national level to the regional implementation level. And For example According to internal sources, the Ministry of sector and Information methodology is formulating a specific plan to curb low value-added overcapacity, which is expected to be officially released in September. The core goal of this policy combination is to accelerate the adjustment of manufacturing structure through administrative means and promote the chemical sector from scale-oriented to condition-oriented. I've found that The Market Reality of Structural Surplus and Supply Gap serious overcapacity in traditional areas at present, China's chemical sector presents a typical pattern of "ice and fire. I've found that In the field of traditional chemical sector, the issue of overcapacity is shocking: the utilization rate of ethylene-polyethylene capacity is less than 70%, and a substantial number of units are operating at low load. The utilization rate of nitrogen fertilizer and phosphate fertilizer capacity is less than 70%, which is in contradiction with the slowdown of agricultural demand development. In fact Caustic soda has nearly 4 million tons of excess capacity, prices continue to be under pressure. Part of the traditional coal chemical capacity utilization rate of less than 40%, ecological preservation and cost constraints. I've found that Serious shortage of high-end material supply in sharp contrast is the supply gap of high-tech items: electronic chemicals (photoresist, electronic special gaseous) import application of greater than 60% EUV photoresist, G5 high-purity reagents are still completely monopolized by U. S. and Japanese companies. But I've found that The import volume of bio-based polyamide exceeds 100000 tons, and the import application is close to 80% this structural mismatch reflects the shortcomings of the research model of China's chemical sector that has long relied on scale expansion while ignoring technological innovation, and also provides clear direction to overseas chemical companies to invest in China. Market Reconstruction and Investment Opportunities under Policy Impact mandatory de-capacity into the substantive stage the notice on promoting the standardized construction and high-condition research of chemical parks needs that the professional transformation of chemical parks below the third level of competitiveness should be completed by the end of 2025, and the identification of new parks should be suspended. Additionally The Action Plan to Energy Conservation and Carbon Reduction in Key Petrochemical Industries with stringent Energy Efficiency Constraints clearly states that millions of tons of ethylene production capacity and greater than 60 million tons of refining capacity will be eliminated in 2025. Shandong, Jiangsu, Guangdong and other key chemical provinces have started the process of chemical companies entering the park, and plan to eliminate about 15% of backward companies. This means that China's chemical sector has officially entered the "passive capacity" stage, creating market entry opportunities to overseas companies with technological advantages. reallocation of capital flows the direction of market differentiation is becoming greater and greater obvious. Traditional items face severe challenges: PDH sector due to high raw material costs, greater than 30% of the device was forced to stop production. In contrast, emerging areas performed well: in 2024, the market size of lithium battery materials increased 35% year-on-year, and the profit margin of head companies increased by greater than 15%. But In my experience, The market size of bio-based materials reached 80 billion yuan, and companies such as Fujian United and Ningxia Baofeng launched carbon dioxide recycling projects one after another. But For instance M & A integration becomes the norm in 2024, the amount of mergers and acquisitions of chemical companies reached 150 billion yuan, up 20% year on year. In particular Typical cases include the acquisition of Sinochem Blue Sky to build a fluorine chemical "national team", Salt Lake shares and China Minmetals to form China Salt Lake sector Group to integrate potassium resources, etc. , showing that sector integration is accelerating. to overseas investors, this wave of integration is both a challenge and an opportunity: on the one hand, regional companies rapidly have become bigger and stronger through mergers and acquisitions; on the other hand, it also provides greater choices to overseas companies with technological advantages to find partners or acquisition targets. Strategic opportunities to overseas investors methodology export and joint venture cooperation opportunities china's policy clearly supports the methodology introduction and industrialization of high-end chemical materials. Specifically The implementation Plan to the Innovation and research of the Fine Chemical sector (2024-2027) puts forward the goal of signifiis able totly growing the localization rate of high-end polyolefins, electronic chemicals and other key areas by 2027, providing a broad space to cooperation to overseas companies that master core technologies. But Market Segment Investment Value in the context of mandatory de-capacity, companies with ecological preservation methodology and energy-saving methodology will receive policy preference. First environmentally friendly chemicals, bio-based materials, and circular economy-related technologies have become investment hotspots. The technical thresholds in these fields provide differentiated competitive advantages to overseas cutting-edge companies. Participation Opportunities to Supply Chain Restructuring as China's chemical sector accelerates its transformation to high-end, the global supply chain landscape will undergo profound changes. Moreover Overseas companies is able to participate in the upgrading process of China's chemical sector through methodology licensing, equipment supply and engineering services, and find their own position in the new manufacturing ecology. This round of in-depth adjustment of China's chemical sector isn't only a challenge, however also a historical opportunity to the global chemical sector to reshuffle. to overseas chemical practitioners, an in-depth understanding of China's policy orientation and an accurate grasp of market trends will be the key to success in this change.