Yuneng new material 13.2 billion epoxy resin project fully started: China's northwest chemical industry pattern ushered in a major change.

On December 16, the epoxy resin integration project (phase I) of Shaanxi yuneng energy and chemical new materials co., ltd. officially started the water supply and drainage and fire fighting pipe network project of the whole plant, marking that this large-scale chemical project with a total investment of 13.2 billion yuan has entered the stage of comprehensive construction. The project is located in the High-tech Industrial Development Zone of Shenmu City, Shaanxi Province, China, covering an area of about 1588 acres, and is expected to be put into production in 2027-2028.

Project strategic value and industrial chain layout

the biggest highlight of the project is its complete integrated industrial chain design. The project includes 800000 tons/year methanol-to-propylene combined plant, 100000 tons/year chloropropylene plant, 100000 tons/year propylene oxide plant, 250000 tons/year epoxy resin plant, 300000 tons/year cumene plant, 350000 tons/year phenol acetone plant and 240000 tons/year bisphenol A plant. In addition, 200000 tons/year hydrogen peroxide device, 100000 tons/year polyolefin elastomer device, 50000 tons/year ethylene propylene rubber device and 100000 tons/year waste salt comprehensive utilization device will be built.

From the perspective of industrial chain, the project has constructed two complete value chains: "methanol-propylene-propylene oxide-epoxy resin" and "benzene-cumene-phenol acetone-bisphenol A- epoxy resin", realizing the vertical integration from basic chemical raw materials to high value-added chemical new materials. As an important coal chemical base in China, Shenmu City has abundant coal and methanol resources, which provides a significant raw material cost advantage for the project, which means more competitive product prices for overseas buyers.

Market Impact and Supply Pattern Changes

the epoxy resin production capacity of 250000 tons/year is of great significance to the global market. At present, the total production capacity of epoxy resin in China is about 2 million tons/year. After the project is put into operation, it will occupy about 12% of the market share and become the largest epoxy resin production base in Northwest China. For international traders, this means that China's epoxy resin export capacity will be further enhanced, and the global supply chain pattern may face adjustment.

The 240000 tons/year bisphenol A plant constructed simultaneously by the project is also worthy of attention. Bisphenol A is a key raw material for epoxy resin and polycarbonate. The commissioning of this project will enhance China's voice in the global bisphenol A market. It is recommended that overseas chemical traders and end-users closely track the progress of project construction and plan procurement strategies and supply chain layout in advance.

Project Progress and Financing Breakthrough

the project promotion efficiency reflects the execution ability of large-scale chemical projects in China. The land approval will be completed on January 2, 2024, the site leveling will start on February 14, the basic design review will be completed in May, the EIA approval will be obtained on October 9, the Societe Generale Bank's credit loan of 2 billion yuan with a term of 15 years will be obtained on November 18, the procurement announcement of core reactor equipment will be completed on November 22 (the supplier is Shanghai Hetu Engineering Co., Ltd.), and the main project will start on December 16. It only took less than a year from land approval to full construction, showing that the preparatory work for the project is solid and efficient.

It is worth noting that under the current background of cautious investment in the global chemical industry, the project can obtain long-term and large-scale credit loans, reflecting the high recognition of the project's technical route and market prospects by Chinese financial institutions. This provides a positive market signal for other overseas chemical companies planning to invest in China.

Implications for international markets

according to the 3-4 year construction cycle, the project is expected to be put into operation in 2027-2028. At that time, it will have a substantial supply impact on the global epoxy resin, bisphenol A, phenol acetone and other products market. It is suggested that enterprises related to the international industrial chain should: first, pay close attention to the time node of the project and evaluate the impact on their own business; second, consider establishing commercial cooperation with the project party to grasp the development opportunities of chemical industry cluster in Northwest China; third, re-evaluate the global procurement strategy and bring Northwest China into the scope of supply chain diversification.