End of monopoly and the beginning of competition in China's petrochem market

03-Aug-05

9 ethylene installations with a total capacity of 600,000 tons went into operation on June 28 at BASF-YPC Company Limited, jointly financed by the Yangtze Petrochemical and BASF of Germany. The following day, the Shanghai Secco Petrochemical Company Ltd., funded by the China Petroleum & Chemistry Corporation (Sinopec) of China and BP of UK announced the operation of its 900,000 ton ethylene project. Prior to this, most of the ethylene products were produced and allocated by two state-owned petrochemical giants, Sinopec and CNPC. The official commercial operation of the Shanghai Secco Ethylene project and BASF-YPC Integrated Project marks the end of monopoly and the beginning of competition in the Vhinese petrochem market. This will give rise to a new structure in China's petrochemical market featuring four major supply systems controlled by Sinopec, PetroChina, joint venture ethylene projects and importers. CNPC opened a chemical sales company in Beijing with branches in Beijing, Shanghai and Guangzhou, which unify the marketing of six major categories of chemical products. Are China's domestic petrochemical giants ready to clamber a share of the market?