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Chinese petrochem firms invest billions to make high-end chemicals used in solar panels, lithium-ion batteries
- Chinese firms are moving from basic petrochemicals to manufacturing higher value products used in solar panels, lithium-ion battery separators and wind turbine blades
- The move up the value chain will help China to cut its dependence on imports from foreign companies like Dow Chemical, ExxonMobil and BASF
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Chinese oil refiners and petrochemical companies are investing tens of billions of dollars to produce high-end chemicals for solar panels and lithium-ion batteries to profit from growing demand for energy transition technologies.
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The investments illustrate China’s drive to reduce its import dependence and further cement its dominance of renewable energy and electric vehicle supply chains. The move pits the Chinese companies against Dow Chemical, ExxonMobil and BASF in making key materials.
Companies including Wanhua Chemical, Zhejiang Petrochemical Corp (ZPC) and Hengli Petrochemical and state oil giant Sinopec are leading the shift, industry executives and analysts said.
They are moving from making more basic petrochemicals for polyester fabrics and plastic packaging to manufacturing higher value products such as polyolefin elastomers (POE) used to protect the cells on solar panels, ultra-high-molecular-weight polyethylene for lithium-ion battery separators and carbon fibre for wind turbine blades.
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“Overcapacity and weak demand for commodity chemicals, and China’s rapidly growing industries like solar, electric vehicles are the key drivers for companies to extend into high-end, high performing materials,” said Kelly Cui, Shanghai-based principal analyst with consultancy Wood Mackenzie.
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