Data released by the National Bureau of Statistics of China on January 27 showed that in 2023, the country’s industrial enterprises above designated size achieved a total profit of 7685.83 billion yuan, a decrease of 2.3% from the previous year.
Among them, the chemical raw materials and chemical industry of products manufacturing achieved a total profit of 469.42 billion yuan, a decrease of 34.1% from the previous year.
The overall performance of the chemical industry in 2023 is mediocre. The intensified contradiction between supply and demand in the context of weak demand recovery and capacity expansion has caused the price center of gravity to shift further downwards. Under the pressure of relatively high energy prices and negative demand feedback, industry profitability continues to shrink and is at its lowest level since 2019.
China’s petrochemical industry ushered in the year of production in 2023. Phenolic ketone and bisphenol A continue to be in the stage of high expansion; aromatic hydrocarbon chain xylene-PX is growing rapidly; olefin chain propylene oxide, acrylic acid, and ethylene oxide all have obvious growth rates. In 2023, bisphenol A production capacity grow by 27.5%; xylene production capacity grow by 6.5%; acrylic acid production capacity grow by 4.62%.
In 2023, under the situation of low prices, reduced profitability, and increased competitive pressure caused by the launch of new equipment in the domestic chemical industry, the elimination of backward production capacity in some industries has accelerated. As the contradiction between supply and demand escalates, the export of chemical products has an obvious growth trend. The export volume of titanium dioxide in 2023 increased by 16.77% compared with 2022; the export volume of epoxy resin in 2023 increased by 57.12% compared with 2022; the export volume of MMA in 2023 increased by 7.09% compared with 2022; the export volume of phthalic anhydride in 2023 increased by 138.06% compared with 2022.
High profits are one of the most fundamental driving forces for industry expansion. In 2024, some Chinese chemical industries were affected by losses, and the pace of production may slow down. Judging from the industry profits in January 2024, titanium dioxide, xylene, MMA, n-butanol, octanol, TDI and other industries still maintain high profit margins, but the losses in bisphenol A, ethylene oxide, phthalic anhydride, styrene, ethylene oxide and other industries are becoming more obvious.
Sample profit situation of China’s chemical industry in January 2024:
The profit of rutile titanium dioxide is 667 yuan/ton, isomerized xylene is 1,087 yuan/ton, acrylic acid is -306 yuan/ton.
The gross processing margin of No. 200 solvent oil is 159 yuan/ton, o-phthalic anhydride is -448 yuan/ton, naphthophthalic anhydride is -427 yuan/ton.
The gross profit of liquid epoxy resin is -277 yuan/ton, solid epoxy resin is -22 yuan/ton.
The average gross profit of bisphenol A industry is -643 yuan/ton, propylene method ECH is 197 yuan/ton, the glycerin method ECH is 1,470 yuan/ton.
The gross processing margin of the ACH method MMA sample is 2573 yuan/ton, and the C4 method MMA sample is 902 yuan/ton.
The theoretical gross profit of chlorohydrin propylene oxide is 104 yuan/ton.
The average profit of imported ethylene manufacturers from external sources of ethylene oxide is -330 yuan/ton, domestic ethylene manufacturers from external sources is -461 yuan/ton.
The average profit of non-integrated styrene units is -387 yuan/ton.
The profit of the domestic hydrogenated neopentyl glycol industry is 35 yuan/ton.
The gross processing margin of Shandong octanol sample is 4,981 yuan/ton.
The production profit of n-butanol is 2,442 yuan/ton.
The industry profit of TDI is 2,300 yuan/ton.
Recently, 2023 performance reports have been released from a number of companies. Among them, Befar Group’s net profit in 2023 dropped by 66.87% year-on-year; Epoxy Base Electronic predicts that its net profit in 2023 decreases by 37%-43% year-on-year; Satellite Chemical estimates net profits to increase by 48%-67.31% year-on-year in 2023; Hengli Petrochemical estimates profits to be 6.9 billion yuan in 2023, a year-on-year increase of 197.63%.
It can be seen that, with the price center of gravity on the low side and industry profits generally declining, enterprises with integrated industrial chains maintain relatively high profit margins. You can view more Chinese chemical suppliers and related product quotations at ECHEMI.COM, as well as Market Price & Insight, Trade Data, etc. to understand global chemical trends.
