Why is China's PDH capacity expansion outpacing global demand growth?

Why is China's PDH capacity expansion outpacing global demand growth?
China's PDH sector has grown from one unit in 2013 to over 22 million tonnes of annual propylene capacity by early 2025, with another 4 million tonnes expected in 2025 alone. This represents a near fivefold increase over the past decade, far exceeding any other chemical process globally. The feedstock requirement is enormous: each tonne of propylene consumes roughly 1.18 tonnes of propane, translating to over 26 million tonnes of annual propane demand at full utilization. Most of this relies on imported propane, making Chinese PDH operators highly sensitive to US export policies, Middle East tensions, and freight costs. Despite persistent losses—2025 saw margins as low as minus 1,000 yuan per tonne—new capacity keeps coming online, driven by integrated players with access to cheap capital and downstream polypropylene units.