China’s forecast increase of 18.7m tonnes/year of chemical capacity in 2024 will account for 81% of the total global increase in capacity. In 2024, China is forecast to account for 23% of global ethylene capacity, the core building block for over 75% of petrochemical products.

What factors are driving petrochemical markets in 2024? Explore the intricacies of the chemical industry’s landscape with a deep dive into the obstacles encountered in 2023, such as the Chinese property bubble burst and geopolitical tensions.

Around 18.7 million tons of chemical capacity were added in China in 2024 alone. Chinese overcapacity has driven global commodity chemical prices to multi-year lows, forced significant plant closures in Europe, and reshaped global trade flows.

In 2024, China’s ethylene industry faces weak demand, financial losses, and slow capacity growth. While exports remain strong, domestic consumption is hampered by a sluggish real estate sector. Ethane cracking remains competitive, while traditional routes struggle.

China’s overcapacity is not a temporary distortion—it’s the new gravity center of global chemicals. That forces a difficult but necessary question for Western players: What is our right to win in a market where the low-cost producer can out scale, outlast, and undercut almost everyone else?

Solution consultant Durai Selvaraj, Valona Intelligence, explains the three common misconceptions shaping the industry’s response to China’s capacity build-out. China’s chemical overcapacity dominates industry conversations, and most analysts agree on the contours: capacity is excessive, Beijing has acknowledged the problem through anti-involution policies, and pressure is concentrated ...

The report delves into market fundamentals, geopolitical factors, logistics and the broader economy, addressing challenges such as persistent overcapacity and low demand in some sectors.

The Chinese chemical industry’s capital investment and capacity additions remained strong in 2024, although growth slowed from the peak in 2021. Polypropylene and polyethylene capacity increased, reflecting China's ongoing expansion to enhance its production capability.

Under the background of "reducing refined oil and increasing chemicals", the ethylene industry may see a peak in new production capacity. As the cornerstone of petrochemical industry, ethylene is an important indicator of a country's petrochemical strength.

Driven by the 15th Five-Year Plan, China's chemical industry aims to lift ethylene capacity to 90 million tonnes, secure 42% of global output and raise high-end material self-sufficiency to 85%.