Lianhong Gurun 300000-ton PO plant production analysis: China's propylene oxide industry has entered the era of 10 million tons.

Integrated project put into production: technical route and capacity pattern reconstruction

on December 22, 2025, the 300000-ton/year propylene oxide (PO) plant and natural gas hydrogen production plant of Lianhong Gerun integration project were successfully put into operation, marking that China's PO industry has entered a new stage of development. The project adopts the process route of CHPPO (cumene method), which shows significant advantages in environmental protection and economy.

Breakthrough in technology it is reflected in three dimensions: first, the CHPPO process achieves isopropylbenzene hydroperoxide (CHP) selectivity of over 99% and PO selectivity of over 98% through isopropylbenzene oxidation, and the reaction efficiency is significantly improved; Secondly, the energy consumption is reduced by 10% compared with similar devices, which is directly converted into cost competitiveness. Third, compared with the traditional chlorohydrin method, the process has no associated products and "three wastes" emissions are greatly reduced, in line with the "Industrial Structure Adjustment Guidance Catalog (2024)", the chlorohydrin law is listed as a restricted category of policy guidance.

Industry background of capacity expansion not to be overlooked. In 2024, China's total PO production capacity was about 7.82 million tons, up 27.78 percent year-on-year, with production reaching 5.27 million tons. It is estimated that 1.24 million tons of new production capacity will be added in 2025, and the total production capacity will exceed the 10 million tons mark. In this context, although the 300000-ton Lianhong Grun plant belongs to the mainstream scale, its advanced technology and integrated layout have become the key to differentiated competition.

It is worth noting that China's PO process route is undergoing a structural transformation: the proportion of indirect oxidation (co-oxidation) has increased from less than 40% in 2021 to 48% in 2023, and the chlorohydrin law has decreased from 42% to 26%. The CHPPO route selected by Lianhong Grun conforms to the trend of green transformation in the industry and lays the foundation for long-term development.

Analysis of Synergistic Advantage of Industrial Chain and Market Competitiveness

the core value of the Lianhong Grun project lies in the construction of a complete "methanol-MTO-propylene-PO-PPG/PPC" vertically integrated industrial chain **, which has multiple strategic significance in the current market environment.

Independent and controllable ability of raw material end significantly enhance the ability to resist risks. Upstream 1.3 million tons/year MTO plant self-produced propylene, with natural gas hydrogen plant supply hydrogen, greatly reducing dependence on the external market. In a market environment with frequent PO price fluctuations, the increase in the self-sufficiency rate of raw materials can effectively smooth cost fluctuations. Compared with enterprises that rely on outsourcing propylene, integrated enterprises can maintain more stable profitability in the cycle of rising raw material prices.

Downstream product layout reflect forward-looking. 240000 tons/year PPG (polyether polyol) device adopts continuous process, the product is used in the production of polyurethane in the fields of household, automobile, building materials, etc., and the demand is relatively rigid. The 50000 tons/year PPC (polypropylene carbonate) device is aimed at the biodegradable material market, which is in line with the "double carbon" policy and the trend of consumption upgrading. This upstream and downstream synergy not only enhances the added value of products, but also flexibly adjusts the product structure according to market changes and enhances profitability.

Analysis of Supply and Demand Patterns and Trade Opportunities it needs to be examined rationally. In 2025, PO will add 1.24 million tons of new production capacity, but the actual downstream impact is only 400000 tons, and the imbalance between supply and demand is obvious. For overseas chemical traders, China's PO export competitiveness may be enhanced, but we need to pay attention to the risk of price war; for downstream buyers, diversification of supply sources is conducive to bargaining, but a supplier quality evaluation system should be established to avoid the impact of low-cost and inferior products.

Industry competition pattern differentiation will accelerate. Under the pressure of overcapacity, integrated enterprises occupy a favorable position by virtue of cost advantages and industrial chain synergy, and single PO production enterprises are facing profit squeeze. Supply chain practitioners need to focus on: first, the cost structure changes brought about by differences in technical routes; second, the exit pressure of environmental protection policies on chlorohydrin enterprises; and third, the impact of changes in downstream demand structure on different grades of PO products.

The commissioning of the Lianhong Grun project marks the transformation of China's PO industry from scale expansion to quality improvement. Technological innovation and industrial chain integration capabilities will become the key factors for future competition.