SunSirs:Review of Newly Added Production Capacity for Eight Domestic Chemical Products in 2026

In 2025, China's chemical industry exhibited a pattern of “overall growth amid profitability pressures.” Domestic annual refining capacity reached a historic milestone of 980 million tons, with 33 refineries exceeding 10 million tons in capacity. Total production capacity for core chemicals like ethylene and propylene has surpassed aggregate market demand. Under the trend of “curbing refining, reducing oil, and boosting chemicals,” integrated refining and petrochemical projects like Zhejiang Petrochemical, Zhenhai Refining & Chemical, and Huajin Aramco will advance in 2026, accelerating the industry's shift toward scale and high-end transformation.

This article reviews the 2026 capacity deployment plans for PP, PE, ABS, PS, PET bottle flakes, methanol, styrene, and ethylene glycol.

PP

PP is projected to add 5.7 million tons of new capacity in 2026, pushing total capacity past the 50-million-ton threshold for the first time. CNPC and Sinopec account for a relatively small share of new capacity, with local refineries and regional light hydrocarbon enterprises driving most additions. Most new capacity is scheduled for commissioning in the second half of the year, likely intensifying market supply pressure and further escalating industry competition.

2026 Domestic Polypropylene Production Enterprises New Capacity Addition

PE

In 2026, PE is projected to add 5.5 million tons of new capacity, with total capacity expected to exceed 45 million tons. The pace of PE capacity releases will accelerate markedly in the second half, with Q3 and Q4 becoming peak commissioning periods. Key projects include Huajin Aramco's 950,000 tons and Sinopec-Saudi Aramco's 1 million tons. New capacity will primarily consist of full-density and HDPE units, while LLDPE commissioning continues to slow.

2026 Domestic Polyethylene Production Enterprises New Capacity Addition

ABS

ABS is projected to add 1.975 million tons of new capacity in 2026, pushing total capacity beyond 12 million tons. While the ABS sector remains in its peak capacity release phase in 2026, expansion pace will moderate. The trend toward increased integration in ABS capacity layout will persist, with industry consolidation and transformation accelerating continuously.

2026 Domestic ABS Production Enterprises New Capacity Addition

PS

PS is projected to add 1.47 million tons of new capacity by 2026, with total capacity expected to exceed 9 million tons. New capacity will primarily concentrate in the core consumption region of East China, further reinforcing the domestic PS industry's pattern of “high density in the east, sparse in the west.” The implementation of the Henan Wangsu project will fill the capacity gap in Central China and reduce logistics costs in North and Central China.

2026 Domestic PS Production Enterprises New Capacity Addition

PET Bottle Chips

Bottle flake capacity is projected to increase by approximately 1 million tons in 2026, pushing total capacity beyond 22 million tons. Since 2023, bottle flake facilities have maintained high capacity additions, resulting in ample industry supply. Demand recovery during the peak season in the first half of the year is expected to drive growth in both supply and demand. However, entering the off-season in the second half, coupled with limited new capacity additions, supply-demand pressures in the bottle flake sector will gradually ease, propelling profits to rebound from low levels.

2026 Domestic  Bottle-Grade Chip (PET Bottle Grade) Production Enterprises New Capacity Addition

Methanol

Methanol is projected to gain 5.5 million tons of new capacity by 2026, including methanol production supporting multiple CTO units. Zhejiang Petrochemical aims to fill the external procurement gap for its existing acetic acid facilities, while Yankuang Lunan Chemical is replacing old capacity with new. Major expansions include Ningxia Baofeng Phase IV and China Coal Yulin Phase II—both integrated coal chemical expansions/new builds with corresponding MTO downstream facilities. The incremental commercial methanol output for external sales will be limited.

2026 Domestic Methanol Production Enterprises New Capacity Addition

Styrene

Styrene: In 2026, only Huajin Aramco's single 700,000-ton-per-year facility will come online, resulting in relatively low annual commissioning pressure. However, in October 2025, Guangxi Petrochemical and Jilin Petrochemical each added 600,000 tons of capacity, while Guoneng's 200,000-ton capacity commenced operations at year-end. Therefore, although overall supply pressure for styrene in 2026 remains manageable, the currently elevated port inventories in Q1 will face significant pressure.

2026 Domestic Styrene Production Enterprises New Capacity Addition

Ethylene Glycol

New ethylene glycol capacity additions will be concentrated in 2026, with an estimated 3.33 million tons of new capacity scheduled for commissioning primarily in the second half of the year. China's ethylene glycol industry capacity is expected to maintain its growth trajectory, surpassing 40 million tons per year by 2030. Future integrated refining and petrochemical projects will increasingly prioritize other ethylene downstream products, gradually narrowing the scale of new capacity additions.

2026 Domestic Ethylene Glycol Production Enterprises New Capacity Addition

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