In 2007, the production of key petroleum and chemical products such as crude oil, methanol, caustic soda, calcium carbide, and PVC saw a significant rise, while fertilizer output experienced its first decline in years. Industry experts attribute this shift to structural adjustments in product offerings and changing market demands. According to data from the Shaanxi Provincial Petroleum and Chemical Industry Management Office, the province produced 9.95 million tons of crude oil, marking a 15.85% increase year-on-year. Crude oil processing reached 15.66 million tons, up by 14.24%. Methanol output surged to 9.62 million tons, reflecting a 27.54% growth. Caustic soda production rose by 33.13%, reaching 290,200 tons, while calcium carbide output increased by 52.18% to 1.999 million tons. PVC output also climbed by 47.84%, reaching 246,700 tons.
However, synthetic ammonia and agricultural fertilizer output declined slightly, with fertilizer output falling by 3.47% and 2.29%, respectively. Despite this, the overall petroleum and chemical industry achieved a total industrial output value of 153.216 billion yuan, representing a 23.43% increase compared to the previous year. The sector also ranked first in profitability among all industries in Shaanxi, with key economic indicators like output value, added value, and sales revenue hitting record highs.
As a resource-rich province, Shaanxi's oil industry holds a dominant position, with both the Changqing Oilfield Company and the Extended Oil Group playing crucial roles. In 2007, the province produced 19.85 million tons of crude oil, making it the fourth-largest oil-producing region in China. The oil sector contributed over 90% of the total output of the petroleum and chemical industry, highlighting its central role in the region’s economy.
While the chemical industry has traditionally had a short supply chain, recent years have seen a shift toward more diversified products. New chemical products like propylene, methanol, dimethyl ether, and PVC have gained market share, driven by evolving consumer needs and strategic business decisions.
Industry analysts note that despite a 10.2% increase in national fertilizer output, Shaanxi’s fertilizer production fell by 3% in 2007. This was partly due to companies shifting focus toward methanol and other chemical products. For instance, Suihua Group launched co-alcohol and dimethyl ether projects, producing 128,000 tons of methanol and 7,500 tons of dimethyl ether, contributing 27% of the company’s total output and over 40% of its profits.
Six nitrogen fertilizer companies in Shaanxi now have methanol production capacity, alongside specialized methanol producers like Lutianhua and Shenmu Chemical. In 2007, Shaanxi ranked fourth nationally in methanol production, with 9.6 million tons produced.
Despite the drop in fertilizer output, the economic performance of these companies remained strong, with rising output values and profits. Market demand played a significant role in this trend, as over 60 domestic fertilizer companies built new methanol plants, accounting for 25% of the country’s methanol production facilities and nearly half of its total capacity.
Companies like Heilongjiang Heihua Group and Shanxi Fengxi Fertilizer Group are planning large-scale methanol projects, with Fengxi aiming to produce 3 million tons of urea and 2 million tons of methanol by the end of the “Eleventh Five-Year Plan.†This reflects a growing demand for alternative energy products like alcohol ethers, which has driven increases in caustic soda, calcium carbide, and PVC production, fueled by demand from the alumina, construction, and plastics sectors.
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