SunSirs: China's Chemical Industry Enters a Supercycle

Meanwhile, demand for specialty chemicals in China's chemical industry is accelerating across new energy, electronics, and high-end equipment sectors. Products such as solid-state battery electrolytes, hydrogen fuel cell materials, and photovoltaic POE films are projected to maintain rapid growth. In the electronics sector, the domestic substitution of electronic chemicals like photoresists, CMP slurries, and ultra-high-purity reagents continues to accelerate. Emerging industries such as low-altitude economy and humanoid robotics are creating entirely new application scenarios for specialty engineering plastics, high-performance fibers, and lightweight composite materials. China's chemical industry is projected to maintain a 40% baseline growth rate over the next five years.

China has become a key investment destination for global chemical companies due to its massive market demand, comprehensive industrial chain support, and relatively low production costs. International chemical giant BASF closed multiple plants at its Ludwigshafen site in Germany and increased its investments in China. BASF projects that China will account for three-quarters of global chemical capacity growth by 2030.

China's Chemical Industry Enters a Supercycle

Traditional European chemical production costs significantly exceed those in the Middle East and Asia, a disadvantage that will persistently hinder Europe's chemical industry development. Currently undergoing profound structural adjustments, European chemical manufacturers are gradually exiting basic chemical production, shifting operations to Asia and the Middle East. This transition enables them to focus on high-end materials and specialty chemicals, forming a “small yet sophisticated” industrial landscape. The trend of European chemical capacity contraction and industrial chain hollowing-out is expected to persist for approximately a decade.

Meanwhile, China's chemical industry, leveraging advantages in cost, scale, and integrated supply chains, is gradually gaining global pricing power for certain products. This shift transforms capacity advantages into export competitiveness, directly challenging Europe's outdated production facilities and creating vast market opportunities for China's leading chemical companies. This represents not merely a transfer of capacity but a fundamental restructuring of the global chemical supply chain. China's chemical industry is transitioning from a “follower” to a “pricing power” in certain sectors, with its global market share and influence poised to rise in tandem. China's chemical sector now stands at the threshold of a new supercycle.