In return for sharing some views on China’s macro trends and direction on government policies, I was able to learn a lot recently about the direction of China’s chemical industry from a group of senior executives from a range of chemical companies.
What did they have to say?
- Asia will generate 70% of global growth in demand for chemicals between 2012 and 2020]
- China’s demand for chemicals in 2020 will be about 70% of total Asian demand and 8x the demand from Japan.
- Key priorities for China – Increase self sufficiency through heavy investment in technologies like coal to olefins – Develop own technology and push it to scale through captive domestic demand (pretty similar to many other industries) – Grow strong domestic champions.
- China’s imports are mainly very basic petrochemicals to which value is added domestically.
- Scale of domestic capacity build up in recent years has moved China from net short to net long (e.g., PET, PVC, acrylic acid).
- Private Chinese companies are reaching global scale (e.g. Wanhua, NHU).
- The Asian chemical industry has changed from one led by Japanese producers to one with leading players in each major market who are in the global top 20 (see below).
Image credit: Ricardo Wang / Flickr