In-depth analysis of China's seven major petrochemical bases: the key fulcrum of the global petrochemical industry pattern

The release of the "Petrochemical Industry Planning and Layout Plan" in 2014 marked that China's petrochemical industry bid farewell to the decentralized development model and entered a new era of intensive layout. The seven national petrochemical bases approved by the State Council-Dalian Changxing Island, Hebei Caofeidian, Jiangsu Lianyungang, Shanghai Caojing, Zhejiang Ningbo, Guangdong Huizhou, Fujian Gulei, carry the strategic mission of China's petrochemical industry transformation and upgrading. Ten years of development has verified a core logic: the differences in resource endowments, location advantages and policy support directly determine the differentiation of the competitive strength of each base. For overseas practitioners, understanding this pattern of differentiation is the key to grasp the opportunities in Sinopec's supply chain.

From the perspective of geographical distribution, the seven bases form a pattern of "two wings unfolding": Dalian Changxing Island in the northeast radiates the Northeast Asian market, Lianyungang, Shanghai Caojing and Ningbo in the east coast form the Yangtze River Delta Chemical Corridor, Huizhou in south China faces Southeast Asia, and Gulei in Fujian connects the two sides of the Taiwan Strait. This layout not only takes into account the port conditions of crude oil imports, but also takes into account the downstream industry supporting and market radiation radius.

The first echelon: the leader who has formed the advantage of scale.

Dalian Changxing Island with Hengli Petrochemical as the core, China has built the most complete "oil refining-aromatics-ethylene-new materials" industry chain. The production capacity of 20 million tons of oil refining, 4.5 million tons of PX and 1.5 million tons of ethylene, supporting 1.8 million tons of ethylene glycol and 1.6 million tons of high-performance resin, has realized the vertical integration from basic chemical industry to photovoltaic packaging materials and lithium battery diaphragm. It is worth noting that Hengli Phase II will make the refining scale of the base reach 40 million tons and 8 million tons of ethylene, which means that the supply capacity of a large refining and chemical enterprise will be added in Northeast Asia in the next five years. For traders, this will significantly change the regional supply and demand balance of bulk chemicals such as PX and ethylene glycol.

Lianyungang, Jiangsu the competitive advantage lies in the "dual-core drive": Shenghong Petrochemical's 16 million-ton refining and chemical integration project is equipped with the world's largest 1 million-ton EVA unit, while Satellite Chemical focuses on light hydrocarbon cracking, forming 1.35 million-ton polyethylene and 2.19 million-ton ethylene oxide production capacity. More importantly, Lianyungang is at the forefront of green transformation-the annual capture of 300000 tons of carbon dioxide, 500000 tons of green hydrogen project, and the country's first "CCUS-green methanol-new energy materials" industrial chain. These layouts will enable the base to take the lead under the requirements of future carbon tariffs and green supply chain.

Ningbo, Zhejiang taking the lead of Zhenhai Refining and Chemical Co., Ltd. with 40 million tons of oil refining and 2.2 million tons of ethylene, supporting Wanhua Chemical Co., Ltd. with 1.8 million tons of MDI and Daxie Petrochemical Co., Ltd. with 12 million tons of oil refining, the densest chemical industry cluster in East China has been formed. The 2 × 200000-ton POE plant in the 1.5 million-ton ethylene expansion project of Zhenhai Refining and Chemical Company is directly aimed at the photovoltaic and new energy automobile materials market, showing the determination of traditional refining and chemical enterprises to transform into high value-added new materials.

Huizhou, Guangdong the uniqueness lies in the highest participation of foreign investment. The 1.6 million-ton ethylene project wholly owned by ExxonMobil is the largest petrochemical investment in China by an American company. Its 1.2 million-ton high-performance polyethylene and 950000-ton differentiated polypropylene plants represent the world's most advanced polyolefin technology. CNOOC's 2.2 million tons of ethylene plus the planned expansion of 1.6 million tons make Huizhou the largest ethylene production base in South China. For overseas suppliers, the internationalization of Huizhou base means higher technical standards and quality requirements.

The second echelon: catch-up and differentiation breakthrough

fujian Gulei although it started late, the growth potential is huge. The first phase of Gulei Petrochemical's 1 million tons of ethylene project has been put into production, and the second phase of 16 million tons of oil refining, 1.5 million tons of ethylene and 2 million tons of aromatics project will be fully put into operation in 2030, which will become the largest petrochemical base on the west coast of the Taiwan Strait. The supporting Fuhaichuang 5.5 million tons of condensate processing and Zhangzhou Qimei 600000 tons of ABS have formed a preliminary industrial chain. The attraction to Taiwan-funded enterprises is Gu Lei's unique advantage.

Shanghai Caojing take the high-end route. Shanghai Petrochemical plans to shut down 700000 tons of old ethylene, build 1.2 million tons of modern equipment, and support 100000 tons of electronic carbonate, 500000 tons of green hydrogen and 1 million tons of CCUS, reflecting the transformation direction of urban chemical bases. Shanghai SECCO 1.09 million tons of ethylene is undergoing ethane cracking transformation, through the import of U.S. ethane to reduce costs, which provides a market opportunity for North American ethane exporters.

Hebei Caofeidian the development is the most lagging behind, but the differentiation advantage is obvious. Fuhai Tangshan 34.56 billion yuan methanol naphtha coupling olefin project is a technological innovation attempt, 1 million tons of ethylene supporting 100000 tons of POE, 200000 tons of EVOH, aimed at high-end new materials. Caofeidian relying on steel by-product gas planning 500000 tons of green hydrogen production capacity, and Beijing-Tianjin-Hebei industry collaboration is its future direction.

Strategic enlightenment: high-end, green reshape the supply chain.

The development of the seven bases presents three major trends: first, upgrading from basic chemical industry to new materials, with POE, α-olefin and electronic chemicals becoming the focus of production expansion; Second, the green transformation is accelerating, with CCUS, green hydrogen and bio-based materials becoming standard. Third, the technical threshold has been raised, and advanced processes such as metallocene catalysis and ethane cracking have been rapidly promoted.

For overseas practitioners, China's seven major bases are both competitors and partners. On the one hand, the successive completion of 40 million-ton refining and chemical bases will change the global trade flow of PX, ethylene glycol and other products; on the other hand, there is still a lot of room for cooperation in the fields of high-end new materials, green chemical technology, and specialty chemicals. Understanding the differentiated positioning of each base and the supporting capacity of the industrial chain will be the basis for formulating China's market strategy. In the next ten years, these seven bases will continue to serve as the core growth poles of China's petrochemical industry, profoundly affecting the evolution of the global chemical industry pattern.