Guotai Haitong Securities released a research report stating that a stable growth work plan for the petrochemical industry is about to be released, driving key industries to focus on structural adjustment, supply optimization, and elimination of outdated production capacity.
It is reported that the country is redefining obsolete petrochemical equipment. The focus will be on main obsolete equipment in refining, coal chemical, chlor-alkali, soda ash, calcium carbide, phosphate fertilizer, tire, fine chemical and other fields that have reached their design service life or have been in actual production operation for more than 20 years. The initiative aims to promote green, intelligent, and safe transformation of obsolete equipment, and accelerate the upgrade and renovation of obsolete, inefficient, and high-risk equipment.
Among petrochemical products, acrylic acid, polyester filament, methanol, PTA and other products have a relatively high proportion of obsolete capacity, with prices and gross profits declining in 2025. The firm believes that if the standards for obsolete petrochemical equipment are tightened, promoting the transformation and elimination of obsolete capacity, leading companies in the industry may benefit.
**Petrochemical Industry Stable Growth Work Plan to Be Released, Promoting Industry Structural Adjustment, Supply Optimization, and Elimination of Outdated Capacity**
On July 1, 2025, the sixth meeting of the Central Financial and Economic Commission was held, emphasizing the need to focus on key difficulties in promoting the construction of a unified national market. The meeting stressed the importance of legally regulating enterprises' low-price disorderly competition, guiding enterprises to improve product quality, and promoting the orderly withdrawal of backward capacity.
On July 18, officials from the Ministry of Industry and Information Technology revealed at a press conference held by the State Council Information Office that a new round of stable growth work plans for ten key industries including steel, non-ferrous metals, petrochemicals, and building materials will be implemented. These plans will drive key industries to focus on structural adjustment, supply optimization, and elimination of backward production capacity, with specific work plans to be released successively in the near future.
**Standards for Obsolete Petrochemical Equipment May Be Tightened**
According to the Anhui Chemical Information WeChat public account, the country is redefining obsolete petrochemical equipment. The focus will be on main obsolete equipment in refining, coal chemical, chlor-alkali, soda ash, calcium carbide, phosphate fertilizer, tire, fine chemical and other fields that have reached their design service life or have been in actual production operation for more than 20 years. This represents a change from the previous common standard of 30 years. The initiative aims to promote green, intelligent, and safe transformation of obsolete equipment, and accelerate the upgrade and renovation of obsolete, inefficient, and high-risk equipment.
**Industries with High Proportion of Obsolete Capacity Including Acrylic Acid, Polyester Filament, Methanol, and Butanone May See Leading Companies Benefit**
According to JLC Network database, comparing current capacity with capacity from ten years ago, among petrochemical products, acrylic acid, polyester filament, methanol, butanone, PTA and other products may have relatively high obsolete capacity. The ratios of capacity from ten years ago to 2024 capacity are 66%, 63%, 61%, and 56% respectively.
Meanwhile, due to weak downstream demand, chemical product prices and profitability have declined in 2025. According to Baiinfo statistics, compared to the beginning of the year, prices of acrylic acid, polyester filament, methanol, and PTA in 2025 have decreased by 18%, 8%, 10%, and 1% respectively, while gross profits have declined by 41%, 516%, 45%, and 80% respectively.
The firm believes that if standards for obsolete petrochemical equipment are tightened, promoting the transformation and elimination of obsolete capacity, leading companies in the industry may benefit.
**Price Law Amendment Draft Released, Significant Meaning for Optimizing Market Environment and Competition Order**
The "Amendment Draft of the Price Law of the People's Republic of China (Draft for Comments)" researched and drafted by the National Development and Reform Commission and the State Administration for Market Regulation was publicly solicited for comments on July 24. The amendment draft contains 10 articles, mainly involving improving government pricing-related content, further clarifying identification standards for improper pricing behavior, and strengthening legal responsibilities for price violations.
The amendment draft adds multiple provisions related to "anti-involution," legally clarifying types of "involution-style" improper pricing behavior at the legal level, and clarifying identification standards for new types of improper pricing behavior in platform economy and digital economy fields. This has significant meaning for optimizing market environment and competition order.
**Risk Warning:** Significant fluctuations in crude oil prices; policies falling short of expectations, etc.