Analysis of ethylene downstream industry and introduction of new materials

Ethylene industry chain: polyethylene is one of the main downstream.

The ethylene production process can be divided into three categories: coal to olefins (CTO/MTO), naphtha steam cracking and ethane cracking. (1) Coal-to-olefins refers to a chemical technology that uses methanol synthesized from coal as raw material (CTO) and produces low-carbon olefins through a fluidized bed reaction similar to catalytic cracking. (2) Steam cracking of naphtha is a process of decomposing hydrocarbon molecules in naphtha at high temperature. Its main product is ethylene, and a small amount of propylene is a by-product. (3) Ethylene production by ethane cracking refers to the process that ethane obtained by direct distillation of crude oil is finally obtained by dehydrogenation, chain scission, diene synthesis and other reactions.

Ethylene production has increased steadily, and downstream products have been widely used. In 2020, China's ethylene output will be 210.6 million tons, up by 5.25% year-on-year. Domestic ethylene downstream products include polyethylene (PE), ethylene glycol, ethylene oxide, styrene, polyvinyl chloride (PVC) and so on. The main downstream products of these derivatives include plastics, fibers, rubber, surfactants, adhesives, coatings and other synthetic materials. , and finally used in packaging, agriculture, construction, electronic appliances, machinery and automobiles. Among them, polyethylene (PE) is the largest downstream consumption field of ethylene in China, and 665,438+0% of ethylene will be used to produce PE in 2020.

The import dependence of polyethylene and ethylene glycol is high. Ethylene monomer is not easy to store and transport, and is usually processed into downstream products for transportation and sales. Among the main downstream products of ethylene, PE and ethylene glycol are highly dependent on imports, accounting for 48.0% and 54.7% respectively in 2020.

New downstream materials of ethylene

Film is the largest downstream consumption field of PE in China at present. The downstream applications of PE include film, hollow container, pipe, injection molding, wire and cable, wire drawing and so on. Among them, the consumption of film accounts for 53.50%(2020), which is mostly used for the production and manufacture of agricultural film and packaging film. In terms of new materials downstream of ethylene, we believe that photovoltaic EVA, POE (film for photovoltaic cell packaging), metallocene polyethylene (mPE) and lithium battery separator (wet method) are expected to usher in development opportunities.

China PE downstream high-end brand products are highly dependent on imports. Domestic polyethylene downstream products are mainly low-end general materials, and the market competition is fierce, while high-end brand products rely heavily on imports. Among them, the import dependence of octene polyethylene exceeds 90%.

2. 1

EVA: The demand for photovoltaic grade is growing rapidly.

EVA is a copolymer of ethylene and vinyl acetate, which can be used to produce photovoltaic films, foams, wires and cables, hot melt adhesives and other products. Different contents of vinyl acetate (VA) can be made into different downstream products. When the VA content of e VA is higher than 28%, it can be used to make photovoltaic films. When the VA content of e VA is 5%- 10%, it can be used to make foam.

_ Supply side: the output has increased steadily, and the dependence on imports has gradually decreased. 20 17-2020, the domestic EVA production capacity will be maintained at 972,000 tons; The output in 2020 is 746,5438+0,000 tons, and the compound annual growth rate from 2065,438+06 to 2020 is 65,438+05%. China has a high dependence on EVA imports. In 2020, the EVA import volume was1177,000 tons, and the import dependence was 63%, which was lower than 72% in 20 16 years.

Photovoltaic EVA is highly dependent on imports. In 20021year, the production capacity of Yushu Energy Chemical, Yangzi Petrochemical and Sinochem Quanzhou was put into production step by step. As of August, 20021year, the domestic EVA production capacity was14.72 million tons, and the total production capacity of the top four enterprises (Sibang, Yanchang Coal and Elm Energy Chemical, Yanshan Petrochemical and Yangzi BASF) accounted for 72.0%. Among them, photovoltaic grade EVA requires higher vinyl acetate content. At present, there are only three domestic enterprises that can produce it: Sibang, Lianhong Xinke and Ningbo Formosa Plastics. According to the prospectus of Lianhong Xinke, in 20 19 years, the output of photovoltaic EVA in China was only134,000 tons, the consumption was 53190,000 tons, and the import dependence was 75%.

The new photovoltaic EVA has a long stable production period, and the tight supply is expected to support the high prosperity. According to our statistics, the new production capacity of EVA currently under construction and planning exceeds 2 million tons, and EVA has entered a new round of capacity expansion. However, according to the record of investor relations activities of Lianhong Xinke on April 8, 2002/KLOC-0, the production of photovoltaic thin film materials usually takes a long period of installation, debugging and exploration, and its proportion in the total production capacity is limited. Therefore, we expect that although there will be a new EVA installation and production plan in the future, photovoltaic grade EVA will achieve stable production for a long time, and the tight supply is expected to support the next 1-2 years.

_ Demand side: Photovoltaic film is the largest downstream consumption field of EVA. In 2020, the domestic EVA consumption will be 6.5438+0.86 million tons, of which the demand for photovoltaic films will account for 33.5%. Secondly, foaming is also an important downstream consumption field of EVA, accounting for 30% in 2020, which is used for middle and high-grade travel shoes, hiking shoes, slippers and sandals soles and interior materials. In addition, EVA can also be used in the field of wires and cables.

According to CPIA forecast quoted in the 2020 annual report of Haiyou New Materials, the global PV installed capacity will maintain a compound annual growth rate of 15%-20% in the next five years, and the global PV installed capacity is expected to reach 270-330GW in 2025. According to this calculation, the demand for photovoltaic grade EVA will increase by about 200,000 tons every year from 20265438+0 to 2025, and the global demand for photovoltaic grade EVA will be 162- 1.98 million tons by 2025.

Price difference: EVA prices have risen sharply since the second half of 2020. 20 13-20 19, the EVA price is basically stable at 10000- 15000 yuan/ton, and the price difference is 3000-8200 yuan/ton. Since the second half of 2020, driven by the demand for photovoltaic installed capacity, the price of EVA has increased by 1.24%. As of August 26th, 20021year, the price of EVA was 2 1500 yuan/ton, and the price difference was 14287 yuan/ton.

2.2

POE: Double glass components bring demand growth, expecting domestic technological breakthrough.

Polyolefin elastomer (POE) is a random polymer elastomer polymerized from ethylene and high-carbon α -olefins (1- butene, 1- hexene, 1- octene, etc.). Due to its special molecular structure, POE has good rheological properties, mechanical properties and ultraviolet resistance.

_ Supply: POE products are completely dependent on imports, and the industry concentration is high. Foreign petrochemical companies with POE production technology will apply for patents for the catalysts needed for production, and strictly block the production technology of high-carbon α -olefins as an important raw material of POE, limiting its transfer. At present, the production technology is only mastered by six large foreign enterprises (Dow, ExxonMobil, Mitsui Chemical, LG Chemical, SK Group and Schabik Company), and the industry concentration is relatively high. Among them, Dow is the world's largest producer of POE, accounting for 42%.

Domestic enterprises accelerate the research and development of POE and raw material octene. As a pure imported product, POE has high production profit and import price at present. Domestic enterprises such as yantai wanhua, Huisheng Project, Jingbo Petrochemical, Maoming Petrochemical and Tianjin Petrochemical are all accelerating the deployment of POE R&D, and the whole is still in the pilot stage, and the industrialization needs further breakthrough. In addition, in terms of POE raw materials, all octenes are imported at present. In the future, the domestic construction of Daqing Petrochemical 500,000 tons, Wanhua Chemical 70,000 tons and Maoming Petrochemical will make up for the gap in the industrial chain.

_ Demand: The largest consumption area of POE in China is the automobile industry. Longzhong information data shows that the domestic POE consumption in 20 19 was 450,000 tons, of which 68% was used in the automobile industry. Longzhong Information predicts that the average annual growth rate of domestic POE consumption will be above 10% in the future.

The increase of market share of double glass components has promoted the growth of POE film demand. At present, the main packaging films are EVA film and POE film. EVA has the advantages of low melting point, good fluidity, high transparency and mature lamination process, but it has low strength, high moisture permeability and water absorption, and poor weather resistance. The greatest advantages of POE film are low water vapor permeability and high volume resistivity, which ensures the safety and long-term aging resistance of the module in high temperature and high humidity environment and enables the module to be used for a long time. For the double-glass module of double-sided battery, the use of multi-layer extruded POE film has strong competitiveness in the production efficiency and comprehensive performance of the module.

In 2020, EVA film is still the main packaging material of components, especially transparent EVA film, but its proportion has decreased. In 2020, the market share of transparent EVA film will be 56.7%, down 12.9 percentage points year-on-year; The proportion of POE film and * * * extruded POE film increased, accounting for 25.5% in 2020, up by 13.5 percentage points year-on-year. We believe that the increase of market share of POE film is due to the increase of market share of double glass components and the increase of EVA particle price. We expect that with the large-scale application of double-glass components and double-sided batteries, high-quality films including multi-layer extruded POE films are expected to further enhance the market scale.

The price of POE rose by 202 1. From 2020-202 1, the price of POE rose step by step, especially since 2026 54 38+0, with the gradual recovery of the demand of the automobile industry, the price of POE rose sharply. As of August 27th, 202 1, the price of POE was 23,000 yuan/ton, up 3 1% from the beginning of the year.

2.3

Lithium battery separator: wet method has a large market space.

_ Industrial chain: the composition structure and industrial chain of lithium batteries. The separator, anode material, cathode material and electrolyte of lithium ion battery are the most important materials. Lithium-ion battery adopts spiral winding structure, and it needs to be separated between the anode and cathode by extremely fine and permeable film isolation material. According to the prospectus and consulting information of Xingyuan Materials, the cost of separator accounts for about 1 1% of the cost of lithium-ion batteries, and the gross profit margin can reach 50%-60%, which is the highest among the four materials.

The upstream of lithium battery industry chain includes cobalt, manganese, nickel, lithium, graphite, polypropylene and polyethylene. In the industrial chain of lithium battery manufacturing, the core part of battery manufacturing is battery core. After the battery cell is packaged, the battery module is composed of wire harness and PVC film, and then the power battery product is composed of wire harness connector and BMS circuit board.

The downstream applications of lithium batteries are very extensive, including energy storage, transportation, consumer electronics and industrial equipment industries. According to the Lithium Battery Research Institute, the demand for lithium batteries in new energy vehicles continues to increase. In 2020, the vehicle power battery shipments in China will be 80GWh, up by 65,438+02.7% year-on-year, accounting for 56% of the lithium battery market in China, far exceeding other application terminals. The growth of 3C digital market tends to be flat. It is expected that with the popularization of 5G technology, the demand for smart phone terminals, the rise of civil drones, smart wearable devices and other products will drive the growth of consumer batteries.

Performance and function of lithium battery separator. The separator of lithium-ion battery has good mechanical properties, chemical stability and high-temperature self-closing performance, which can improve the comprehensive performance of lithium-ion battery from the aspects of isolating the positive and negative electrodes of the battery, allowing lithium ions to pass through and preventing battery explosion caused by high temperature, so that lithium-ion battery has obvious advantages over traditional lead-acid batteries and nickel-cadmium batteries in energy density, cycle life, environmental protection and safety.

The separator of lithium-ion battery has a large number of zigzag micropores, which can ensure the free passage of electrolyte ions and form a charge-discharge circuit; However, when the battery is overcharged or the temperature rises, the diaphragm separates the anode and cathode of the battery through the function of obturator to prevent direct contact and short circuit, thus blocking current conduction and preventing the battery from overheating or even explosion.

Main production technology of lithium battery separator. Many characteristics of lithium ion battery separator have special requirements for its production process, including raw material formula and rapid formula adjustment, micropore preparation technology, independent design of complete sets of equipment and other processes. Among them, micropore preparation technology is the core of lithium ion battery separator preparation process, which is divided into wet biaxial stretching process and dry process. Among them, the wet diaphragm is a polyethylene monolayer film, and the main raw material of the dry method is a polypropylene monolayer film.

From the downstream subdivision of the two production processes, the dry process with polypropylene as the main raw material is used for lithium iron phosphate power battery (hereinafter referred to as LFP battery); Wet process mainly flows to ternary material power battery and 3C consumer electronics.

_ Supply: The domestic lithium battery separator market has a large space. According to the data cited by Prospective Industry Research Institute, the shipment of lithium batteries in China in 2020 was 3.72 billion square meters, up 35.8% year-on-year. We believe that in 2020H2, the epidemic situation of COVID-19 in China has been controlled, and the shipments of low-power, 3C digital and energy storage lithium batteries have been greatly increased, so domestic enterprises have the competitive advantage of low cost and high performance.

The shipments of wet diaphragm increased steadily, and the proportion remained stable. According to the data of Hi-Tech Lithium Battery Research Institute, from the perspective of diaphragm product structure, the shipment of wet diaphragm in 2020 was 2.6 billion cubic meters, up 30% year-on-year, accounting for 70% of the total diaphragm shipment. In 2020, the proportion of wet diaphragm is 70.40%, which is close to 20 19.

Compared with dry process, wet separator has the advantages of thin thickness, high strength and uniform hole making, which can better meet the requirements of lithium ion battery separator. However, the disadvantage of wet diaphragm is high cost, which is mainly used for high-end digital and ternary power lithium battery products.

The production capacity of lithium battery diaphragm is constantly expanding, and the high-end production capacity is insufficient. According to the official account of WeChat, a new chemical material, ICC information is quoted. Since 20 15, the domestic lithium battery separator capacity has expanded rapidly. By the end of 2020, the domestic wet separator capacity will reach 7 billion cubic meters per year, and the dry separator capacity will be close to 3 billion cubic meters per year. The scale effect of enterprise capacity is improved, and the diaphragm cost is further reduced, which leads to the decrease of diaphragm price and market scale. At the same time of large-scale expansion of production capacity, the contradiction between high-end production capacity and low-end overcapacity of domestic diaphragm is becoming more and more prominent. At present, domestic high-end wet process relies heavily on imports.

The lack of research and development ability of matrix raw materials puzzles product autonomy. The lack of research and development ability of matrix raw materials is the main problem in the production of wet diaphragm in China. The matrix material is mainly high molecular weight polyethylene. According to the statistics of Xinsijie Industry Research Center, in 2065.438+09, the demand of HDPE in China was about 6.5438+0459 million tons, but the domestic output was only about 7 million tons, of which the import dependence was about 48%.

In terms of domestic market share distribution, in 2020, En Jie will account for 44.90%, and the other major manufacturers are Xingyuan Materials (19.6%) and Sinoma Technology (18%). In terms of dry process, Xingyuan materials is the industry leader, accounting for 23.5% of the total market share. 2065438+August 2009, the company disclosed the project plan of "Super Paint Factory", with a total construction period of 36 months and construction in two phases. In the first phase, it is planned to build 8 dry diaphragm production lines and 30 coated diaphragm production lines with an annual production capacity of 400 million square meters. The company's 2020 annual report shows that the construction of the "Super Paint Factory" project is progressing smoothly and has been supplied to customers.

In addition, according to the semi-annual report of Hengli Petrochemical (20021), the company deeply explored the demand trend of new energy for new chemical materials, and quickly laid out the field of lithium battery separators with the strategic support of chemical platform and the accumulation of downstream high-end separator market for many years. At present, the company has substantially started all preparations for the capacity building of new lithium battery separator products, including the procurement negotiation of separator equipment and the recruitment of core talents in the market, so as to promote business progress quickly and efficiently.

_ Demand: The increase in sales of new energy vehicles drives the demand for power batteries. Behind the large-scale expansion of diaphragm enterprises is a new round of capacity expansion competition in the field of power batteries and a substantial increase in sales of new energy vehicles, which has generated strong demand for lithium battery diaphragms, thus attracting diaphragm enterprises to actively expand production and follow up. In June of 20021year, the output of new energy vehicles reached 273,000, up by 135.3% year-on-year, and the cumulative output was 202 1 h1,up by 205% year-on-year, which further boosted the output of power batteries and increased by 65,438 in June of 2002.

In the future, there is a great demand for lithium battery separators in China. According to the data from the Institute of Lithium Batteries of Hi-Tech, domestic lithium battery shipments 143 GWh in 2020 increased by 22% year-on-year, and it is expected to reach 232GWh in 2026, 438+05 GWh in 2025, with a compound growth rate of 27.6% from 2026 to 2025. Based on the compound growth rate of 27.6%, the estimated shipments from 202/kloc-0 to 2025 are 232, 296, 378, 482 and 6 15GWh respectively.

According to the reply of En Jie, which was quoted by Flush Financial Research Center on the investor interaction platform, the demand for lithium batteries in 1 GWh is about150,000 square meters. Therefore, we predict that the demand for lithium batteries in China will reach 3.48, 44.4, 56.7, 7.23 and 9.23 billion square meters in 2026 and 5438+0-2025 respectively.

Wet diaphragm has a large market space in the future. According to the calculation of the proportion of wet diaphragm technology and its growth rate in 2020, we predict that the proportion of wet diaphragm technology will remain stable in 20021year, and the demand for wet diaphragm in 20021year will be about 2.44 billion square meters. In the future, with the expansion of lithium battery separator market, the demand for wet separator will be further expanded.

2.4

Metallocene polyethylene: the demand for new packaging films drives demand growth

Metallocene polyethylene (mPE) is polyethylene produced by using metallocene as catalyst. MPE has the advantages of good rigidity and transparency, high heat sealing strength, excellent stress cracking resistance and obvious weight loss. It is the metallocene polymer with the highest output, the fastest application progress and the most active research and development.

_ supply: domestic mPE supply mainly depends on imports. In 20 19, the global mPE output exceeded 24 million tons. In 20 19, the output of mPE in China was about 200,000 tons, the consumption was about 922,000 tons, and the self-sufficiency rate was only 2 1.7%. In 2020, China imported about 780,000 tons of mPE. At present, there are 6 mPE manufacturers in China, namely Qilu Branch of China Petrochemical Company, Maoming Branch and Yangzi Petrochemical Company. China Petroleum Daqing Petrochemical Company and Dushanzi Petrochemical Company; China Chemical Shenyang Chemical Co., Ltd. adopts imported metallocene catalyst for all enterprises except China Petrochemical Company.

In the future, the planned output of domestic mPE will reach 6.5438+600,000 tons. With the development of metallocene catalyst and its mPE in China, the products have made great progress. We expect that the import dependence of domestic mPE is expected to decrease in the future.

_ Demand: The global demand for mPE will grow rapidly in the future. In 2020, the global demand for mPE will reach 25 million tons. Europe and America are the markets with the largest demand for mPE. Among them, the average annual demand growth rate of metallocene low density polyethylene in the United States in the past five years is about 17%, and the demand in 2020 is about 2.5 million tons. It is estimated that the demand in 20021year will reach 3 million tons. In the same period, the consumption of mPE in Asia is growing rapidly, especially China, Japanese, Korean and Singaporean are becoming important consumer markets with huge demand potential.

The upgrading of domestic downstream product structure drives the growth of mPE demand. According to the current market situation and technical progress of metallocene polyethylene, it is predicted that the demand for mPE in China will continue to increase at a rate of more than 10%, and it will reach 1 10,000 tons in 2020 and110,000 tons in 2026. Among them, from the downstream field of mPE, the application in the packaging field accounts for the highest proportion, accounting for about 70%, and PE-RT pipes account for about 25%. At present, major foreign companies are actively studying metallocene polyethylene repackaging film. By using a new repackaged film, the film thickness can be reduced while keeping the film performance unchanged. Metallocene polyethylene can also be made into breathable film after biaxial stretching, which is widely used in protective clothing and waterproof materials for buildings.

_ price: The price of MPE has shown an overall upward trend since June 2020. The price of mPE reached its peak in March of 20021,and then began to decline continuously, and rebounded slightly in July. 2020-202 1, the overall price trend is on the rise.

Risk warning

The demand for ethylene and its downstream products is less than expected; New production capacity is put into use quickly; The price of products fluctuates greatly.