348 Million Tons Of New Production Capacity In Half A Year! 2025 China Polyethylene Structural Leap

The most notable feature of this round of capacity expansion is the diversification revolution of raw material routes. The ethane cracking-based light hydrocarbon route facilities have been put into operation for the first time, posing substantial substitution pressure on traditional coal-based and oil-based polyethylene production capacities. This shift has directly led to a decline in the proportion of oil-based and coal-based routes in total production capacity, while the proportion of light hydrocarbon routes has significantly increased. The differences in production costs among various raw material routes have been further amplified, forcing enterprises across the industry to continuously optimize processes and improve efficiency to cope with increasingly intense cost competition.

The participants in capacity expansion exhibit unprecedented diversity.

Large central state-owned enterpriseFor example, PetroChina continues to play a foundational role in the industry.

Private giantRepresented by Yulong Petrochemical, it has demonstrated strong development momentum.

International Chemical LeaderExxonMobil (with its LLDPE facilities) and BASF (with its FDPE facilities) are deeply involved in the layout of the Chinese market.

This has formed a complex competitive and cooperative landscape of "state-owned enterprises leading, private enterprises rising, and foreign enterprises deeply cultivating." The introduction of internationally advanced equipment has not only directly elevated the technological baseline of domestic production capacity but also provided differentiated products that offer new technical references and choices for the market.

The new production capacity has achieved coverage of the full range of polyethylene products.

High-density polyethylene (HDPE)

Full Density Polyethylene (FDPE/mLLDPE)

Linear Low-Density Polyethylene (LLDPE)

High-density polyethylene (HDPE)

LDPE/EVA flexible device with flexible switching capability

This comprehensive capacity expansion across all categories has intensified market competition pressure in every niche application area of the polyethylene industry chain. The advantage of enterprises relying solely on scale or a single product has been diminished, highlighting the growing importance of refined operations and product customization capabilities.

Looking back from mid-2025, the core transformation of China’s polyethylene industry has shifted from a mere competition in production capacity scale to a dual pursuit of quality and efficiency. Although the short-term pressure of homogeneous competition brought by large-scale newly added capacity is inevitable, deep structural changes are laying the foundation for the future: the technological maturity and cost optimization potential of light hydrocarbon feedstock routes, the high-end differentiated product strategies introduced by international companies, and the production flexibility and market responsiveness enabled by flexible plants—all these factors collectively point to an industry development direction that places greater emphasis on efficiency, innovation, and sustainability.