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China ramps up ethylene output, aka ‘industrial gold’, amid Iran war disruptions

PetroChina’s Xinjiang hub shifts output to the western interior region to rebalance coastal-heavy sector and hit green goals as Middle East conflict flares

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An ethylene plant under construction at a PetroChina subsidiary’s petrochemical’s base in Jilin province in 2024. Photo: Xinhua
Alice Li

China is increasing production of ethylene, a petroleum derivative, in its oil-and-gas-rich west, with new facilities designed to meet carbon emission reduction targets, as conflict in the Middle East sparks concerns over supply chain vulnerabilities.

PetroChina subsidiary Dushanzi Petrochemical brought an ethylene production line online in the Xinjiang Uygur autonomous region on Thursday, expanding its annual production capacity by 1.2 million tonnes, PetroChina said in a statement. It said the expansion would raise Dushanzi’s annual production capacity in the region to 3 million tonnes, making it the largest ethylene production hub in central and western China.
“This will reshape the long-standing east-west geographic imbalance of domestic ethylene capacity, while enhancing the resilience and security of energy and chemical supply chains,” said PetroChina, the listed arm of state-owned China National Petroleum Corporation.

Ethylene, which has been dubbed “industrial gold” in China, is critical to the production of modern industrial goods, spanning everything from everyday plastics to synthetic fibres and advanced materials.

China is the world’s largest producer of the chemical, Guolian Futures said in a research note released earlier this year, with an annual production capacity of more than 62 million tonnes by the end of last year.

However, production remains heavily concentrated in eastern coastal regions, which accounted for 65 per cent of national output last year, China Petroleum Daily, a newspaper affiliated with PetroChina, reported on Thursday.

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