Shandong is a time-honoured chemical province in China. After Shandong’s output value of chemicals exceeded Jiangsu for the first time, Shandong had ranked first as chemical industry leader in the country for 28 consecutive years. National key chemical products are supplied in the place, forming an industrial system of seven segments, covering refining, fertilizer, inorganic chemicals, organic chemicals, rubber processing, fine chemicals and synthetic materials. The output of some key chemical products in Shandong is top-ranked nationwide.

In Shandong, there is a large oilfield with an annual output of more than 20 million tonnes of crude oil – Shengli Oil Field, a number of backbone coal mines such as Shandong Energy Group (producing 100 million tonnes of coal every year), as well as major municipal ports – Qingdao and Dongying. Its comprehensive conditions of raw material supply are incomparable in China. Thanks to abundant resources, convenient logistics and location economic conditions, Shandong has achieved the largest oil refining capacity in China. Its crude oil processing capacity accounted for 30% of the country’s total capacity. Shandong is second to none in the refining industry. In terms of coking, fertilizer and new coal chemical industries, it has also kept influential. By virtue of solid basic raw material industry, Shandong has an important position in Chinese propylene oxide market. The production capacity of propylene oxide in Shandong Province made up 53% of the national output in 2015.

Geographical Distribution of China Propylene Oxide Capacity 2015

Since the launch of the special action for the transformation and upgrading of chemical industry in 2017, Shandong Province has completed the rating and evaluation of more than 7,700 chemical production, hazardous chemical warehousing operation and transportation enterprises. Among them, 2,369 enterprises that have not met the standards have quitted in an orderly manner. The number of chemical production enterprises above designated size in Shandong Province dropped to 2,847 at the end of 2020, accounting for 12% of the total in the country.“High energy consumption, high pollution and high risk” has been transformed to “high-quality development, high-end chemical industry, and high-efficiency industrial park”.

In terms of aldehyde value, content, moisture and other indicators, the chlorohydrination process is mature and low-cost, whose product is more quality. Therefore, it has always been the mainstream production process of propylene oxide in China. The Catalogue for Guiding Industry Restructuring (2011 edition) issued by Chinese government in 2011 clearly states that new chlorohydrination-based PO facilities will be restricted. With enhanced environmental protection inspections, most chlorohydrination-based PO facilities have been forced to cut output or even shut down, including Meizhou Bay in Fujian. As the PO process in Shandong Province is still dominated by chlorohydrination, Shandong’s market share is decreasing year by year. The proportion of PO capacity in Shandong shrank to 47% in 2022 from 53% in 2015.

Geographical Distribution of China Propylene Oxide Capacity 2022

The number of chemical enterprises in Jiangsu, Shandong, Zhejiang and other eastern coastal provinces has plummeted, gradually moving to the central, western and northeastern regions of China. There have been 632 new transfer projects nationwide since 2019! Hazardous chemical manufacturers are distributed in Shandong’s original 16 prefecture-level cities, and more than 60,000 hazardous chemical transport vehicles drive on the provincial main roads every day. After five years of rectification, Shandong chemical parks have been reduced from 199 to 84, and more than 2,000 unqualified enterprises have been closed. Most newly built or proposed PO projects adopt the co-oxidation process. In the next five years, PO capacity will bloom in China, with an estimated capacity of 6.57 million tonnes per annum, according to Pudaily’s forecast.

Taking the six key projects in Aksu Prefecture of Xinjiang as an example, there are 5 key projects in the energy and chemical industry, including 300kT PO facility, 400kT ethylene glycol facility, 400kT PET facility, coal tar deep processing plant in Baicheng County, and 15kT cyclohexane facility in Xinhe County, which enjoy extremely low costs in water, electricity, natural gas and land use; enjoy national policy advantages including the country’s western development, the Silk Road Economic Belt, the national sci-tech development zone and the development strategy of southern Xinjiang. Moreover, Kuqa Economic and Technological Development Zone has formed a development pattern of “one zone and six parks”, involving energy and chemicals, textile and garment, agricultural and sideline product processing, equipment manufacturing, building materials and metallurgy, as well as emerging industries. The supporting facilities and infrastructure in the parks have been fully equipped and perfected.

2. Declaration:The article is quoted from PU DAILY

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