Rongsheng Petrochemical, China’s largest petrochemical company, will begin a major expansion of petrochemical products at the beginning of the new year. The expansion portfolio includes intermediate raw materials and synthetic resins, which are the main products of Korean petrochemical companies.
Rongsheng Petrochemical will invest 86.9 billion yuan (US$12.2 billion) to develop a refinery and petrochemical project in China’s Zhoushan Islands, according to sources in the petrochemical industry on Jan. 10. As part of the refinery project, the Chinese petrochemical giant will build a three-million-tons-per-year catalytic cracking unit and a one-million-tons-per-year separation unit. The refinery will also include an aromatics extraction plant with a capacity of 600,000 tons per year.
Rongsheng Petrochemical emphasized that it will have an annual capacity of 300,000 tons of refined ethylene oxide (EO), one million tons of ethylene vinyl acetate, and 200,000 tons of polyolefin elastomer (POE) in a petrochemical complex. It will also produce 400,000 tons of phenol and 250,000 tons of acetone per year.
Furthermore, Rongsheng Petrochemical will produce 400,000 tons of propylene oxide (PO), a basic raw material for polyurethane; 800,000 tons of styrene monomer, an intermediate raw material; 500,000 tons of 1,4-butanediol, a raw material for spandex; and 120,000 tons of isobutylene, a raw material for antioxidants. It will set up a carbon dioxide capture unit for 150,000 tons a year.
The most stunning development to Korean petrochemical companies is Rongsheng Petrochemical’s expansion of the synthetic resin sector. It will build production facilities to produce 1.2 million tons of ABS, which LG Chem, Lotte Advanced Materials, and Kumho Petrochemical are producing, among other Korean companies. The company will build two facilities for polycarbonate production as well in order to secure a production of 520,000 tons in total. ABS is a durable and processable material used for the exterior of various electronic products. Until 2021, LG Chem was the global leader in the ABS business. However, some analysts say that LG Chem will lose the top spot to Taiwanese and Chinese companies.
There has been a strong sense of crisis in the Korean petroleum industry since the beginning of the year. In particular, Lotte Chemical sold all of its general-purpose petrochemical production plants in China in 2023. This is because China’s aggressive expansion of general-purpose petrochemical plants weakened its price competitiveness. Lotte Chemical is reorganizing its business to increase production of high-value-added products.