New plant bolsters resilient capacity

The start of operations at the world's largest single-site olefin plant in China, a testament to the rapid growth of the country's industrial capacity, is expected to further bolster the nation's self-sufficiency in key chemical products, said industry experts.

Located in Ordos of North China's Inner Mongolia autonomous region, the Baofeng olefin project officially began operations in February. With a total investment of 48.4 billion yuan ($6.68 billion), the project boasts a daily production capacity of over 4,000 metric tons of olefin products.

It will significantly enhance China's import substitution capability, and utilizes advanced coal-to-olefin technology, reducing overall energy consumption by nearly 20 percent.

Olefin, also known as alkene, is one of the most basic raw materials in the chemical industry. It can be used to make polyolefin and synthetic rubber, widely used in packaging, furniture, household appliances, automobiles, aerospace and other fields.

China's large-scale investments in the petrochemical sector are part of a broader strategy to capitalize on its vast domestic market and strengthen its global position. This infrastructure, combined with a shift toward higher-value products, such as advanced chemicals and specialty materials, is positioning the nation to capture greater market share, particularly in high-margin sectors, said industry experts.

The plant's capacity is expected to further replace imports and strengthen China's petrochemical industry as well as the country's resilience amid ongoing global trade frictions, said Lin Boqiang, head of the China Institute for Studies in Energy Policy at Xiamen University.

"This plant plays a crucial role in reinforcing China's import substitution capability, ensuring a more reliable and secure supply of olefin products," he said.

"It also provides a model for future large-scale, sustainable industrial projects that can drive the country's transition to a more energy-efficient and self-reliant petrochemical industry."

The plant has 100 percent domestically manufactured equipment, with 23 key components reaching world-class standards.

Olefin products manufactured at the plant will be transported via intelligent packaging and logistics systems to markets in East and South China, helping to eliminate domestic supply gaps.

The project comes at a time when China's petrochemical sector is showing signs of recovery after a period of challenges.

The petrochemical sector's revenue rose to 16.28 trillion yuan ($2.24 trillion) last year, up 2.1 percent year-on-year amid an intricate landscape, with robust prospects expected in 2025, driven by a rebound in global oil prices, rising domestic demand and strong government support, according to the China Petroleum and Chemical Industry Association.

The petrochemical industry of China, the world's largest consumer of petrochemical products as well as an essential hub in global supply chains, is on track for recovery after bottoming out and stabilizing last year, it said.

The association said there has been a trend of Chinese petrochemical firms pivoting to high-end chemicals, a response to increasing global demand for sustainable products as well as a strategy to improve profit margins in a highly competitive global market.

"By focusing on advanced materials and specialty chemicals, Chinese companies are capturing demand in sectors with higher margins," said Fu Xiangsheng, vice-president of the association.