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HDPE has excellent performance characteristics of good strength, good toughness, good rigidity, and corrosion resistance, waterproof and moisture-proof, heat and cold resistance, so it has important applications in blow molding, injection molding and pipe.  With the formation of industry trends such as plastic instead of steel, plastic instead of wood, HDPE as a high-performance polyethylene material will accelerate the replacement of traditional materials in the future.  As the main material of agricultural and packaging film, LDPE is inferior to LLDPE in mechanical strength, heat insulation and moisture insulation performance, and corrosion resistance. Therefore, the market demand of LLDPE has been growing rapidly in recent years, gradually swallowing up some market share of LDPE.

1. Polyethylene (PE) industry chain

Polyethylene is one of the five major synthetic resins, but also the largest production capacity of domestic synthetic resins, imports the most varieties.  Because polyethylene is upstream of ethylene, production is mainly based on the naphtha route, and the profitability is similar.

The largest downstream application of polyethylene is film, which accounted for about 54% of the total demand for polyethylene in 2020. In addition, tubular equipment accounted for 12%, hollow containers accounted for 12%, injection molding accounted for 11%, and wire drawing accounted for 4%.

2. Current situation of polyethylene (PE) industry

In recent years, the country’s polyethylene production capacity has increased year by year. By 2021, the country’s polyethylene production capacity is about 25,746,300 tons, up 11.8% year on year.

In terms of production, since 2018, China’s polyethylene production has steadily increased. In 2018, China’s polyethylene production was about 16.26 million tons, and reached 22.72 million tons in 2021, with an average annual compound growth rate of 11.8% during the period.

From 2015 to 2020, the apparent consumption of polyethylene in China gradually increased, and in 2021, the apparent consumption of polyethylene in China decreased to 37.365,000 tons, a decrease of 3.2% year-on-year.  Mainly due to the impact of the epidemic and the dual control of energy consumption, some downstream factories have suspended or reduced production.  With the improvement of self-sufficiency, the import dependence of PE will gradually decrease. In the future, with the improvement of the epidemic and the steady growth of the domestic economy, the demand for PE will continue to increase.

According to customs statistics, from January to February 2022, the total import of polyethylene was about 2,217,900 tons, 13.46% less than the same period last year.  Our country polyethylene imports the largest quantity from Saudi Arabia, the total import is 475,900 tons, accounting for 21.46%;  The second is Iran, with a total import of 328,300 tons, accounting for 14.80%;  The third is the United Arab Emirates, with a total import of 299,600 tons, accounting for 13.51%.

In terms of exports, from January to February 2022, China’s polyethylene import volume showed a decline, while in sharp contrast, the export rose sharply.  About 53,100 tons of polyethylene were exported in January-February 2022, up 29.76% from the same period last year.  Specifically, LDPE exports about 22,100 tons, HDPE exports about 25,400 tons, and LLDPE exports about 50,600 tons.

3. Technical problems of polyethylene (PE) industry

At present, the development of polyethylene technology in China has the following problems:

(1) Lack of advanced polyethylene production technology. In China, only Fushun Ethylene Chemical plant uses Sclairtech process technology to produce octene 1 copolymerization products, and only Shanghai Jinshan Petrochemical Company has Borealis Bostar North Star supercritical polymerization process technology.  Insite solvent process technology of Dow Chemical Co., LTD has not been introduced in China.

(2) The lack of advanced α-olefin copolymerization of polyethylene raw materials and technology, China has mastered the copolymerization of 1-butene and 1-hexene to prepare polyethylene, in 1-octene, decene, 4-methyl-1-pentene and other advanced α-olefin industrial production is still blank.

(3) High production cost of EVA raw materials, few products with high VA content, and little effort in the development of functional film and hot melt adhesive.