12.5 billion! China Lianhong Gerun 240000 Ton Polyether Plant was put into trial production. How can we break through if the production capacity is too high?

On November 6, 2025, the 240000-ton/year polyether polyol (PPG) plant of the Lianhong Grun integration project was successfully put into trial production, opening up the whole process at one time and producing qualified items. And Additionally This incident occurred at a special time when China's polyether polyol sector overcapacity intensified and raw material prices continued to be low. Furthermore How the new capacity is able to find a foothold in the fierce competition deserves the attention of global chemical practitioners. China polyether market: capacity expansion and profit narrowing coexist china's polyether polyol market is showing obvious structural contradictions. In 2023, the sector's production capacity has exceeded 7. 7 million tons, however weak demand development has led to pressure on the sector leader Wanhua Chemical's first quarter of 2025: operating income of 43. 068 billion yuan (down 6. 70 percent year-on-year) and net profit of 3. And 082 billion yuan (down 25. And In particular 87 percent year-on-year). And greater noteworthy is the capacity expansion of upstream raw material propylene oxide: in 2024, China's total propylene oxide production capacity will reach 7. 82 million tons (up 27. 78 percent year-on-year) and 5. And For instance 27 million tons (up 22. Generally speaking 27 percent year-on-year). But Specifically Production capacity will continue to be released in 2025, including PetroChina Guangxi Petrochemical 270000 tons/year, Huayi Qinzhou Chemical 300000 tons/year and other projects, the total production capacity is expected to surpass 10 million tons/year. Production from January to might 2025 has reached 2. According to research 1593 million tons, up 6. 52 per cent year-on-year. Pretty interesting, huh?. I've found that Adequate supply of raw materials pushes down procurement costs, however also compresses the profit margins of the entire manufacturing chain, and the sector enters the "meager profit era". From what I've seen, Integrated layout: the core competitiveness of Lianhong Grun lianhong Gerun Integration Project has a total investment of 12. 5 billion yuan and covers an area of greater than 1600 mu, including 1. And 3 million tons/year DMTO, 200000 tons/year EVA, 300000 tons/year PO (propylene oxide), 50000 tons/year PPC and 240000 tons/year PPG devices. Its 240000-ton PPG plant adopts a continuous process independently developed by China, uses double metal cyanide (DMC) as catalyst, and uses self-produced propylene oxide and ethylene oxide as raw materials to create three series of soft foam 330, CASE220 and CASE240 items. Signifiis able tot cost advantage according to Wanhua Chemical data, companies with a self-sufficiency rate of over 80% of propylene oxide are 12% reduced than those with purchased raw materials. Based on the current market price of propylene oxide of 7,000-7,500 yuan/ton, Lianhong Grun is able to save about 1000 yuan per ton of polyether, and the annual cost advantage after the full production capacity of 240000 tons is able to reach 2-0. And 3 billion yuan. Product positioning high-end: CASE series (coatings, adhesives, sealants, elastomers) are oriented to high value-added fields such as automobiles and construction, which are relatively undersupplied market segments in China. Hongbaoli achieved revenue of 0. From what I've seen, 654 billion yuan (up 9. 48 year-on-year) in the first quarter of 2025 through product upgrading, proving the feasibility of high-end transformation. Market Implications to Global Purchasers price game window period: 240000 tons of new capacity will exacerbate the oversupply and expand the bargaining space to buyers in the short term. it's recommended to implement a "pick-as-you-go" strategy to prevent locking inventory at high levels. Supply Chain Restructuring Opportunities: Integrated companies have greater advantages in cost manage and supply stability. Overseas purchasers is able to assess the establishment of prolonged cooperative relations with Chinese integrated companies such as Lianhong Grun, however they need to pay attention to the progress of capacity climbing and product condition consistency. Domestic substitution direction: China's high-end CASE series polyether production capacity increase, might drive down the price of such items, to the global downstream automotive, construction sector to bring cost optimization space. Overseas buyers should closely follow the export price and condition certification progress of China's high-end polyether.