GreenergyDaily

Aug. 14, 2025

A key segment of China's petrochemical sector is set to expand by almost half between now and 2028 even as growing competition in the broader refining sector slashes profits.

Capacity to make ethylene, a key ingredient in plastics, will rise by 40 million metric tons between 2025 and 2028, taking total capacity to 100 million tons, Li Suoshan, an executive at a chemical logistics company owned by Sinopec, said on Thursday at a conference in China's Jiangsu province.

Demand growth for traditional petrochemicals is set to slow over the next five years with margins weak in 2025 and profits likely to reduce further, he added.

Losses across refining and petrochemicals increased by 8.3% in the first half compared to a year earlier, said Fu Xiangsheng, vice chairman of the China Petroleum and Chemical Industry Federation, at the same conference.

The sectors are both facing "involution," a popular reference in China to brutal competition that destroys profits, he added.

Fu said it was not appropriate to use blanket rules related to size, utilisation or profitability to decide which refineries to shut and instead said decisions should be a combination of state policy and market forces.

Petrochemical prices should ultimately rise as China tackles "involution," he said, although he did not provide a timeframe.