Analysts indicate that 2026 is poised to be a pivotal year in the cyclical development of China's chemical industry. From a policy perspective, the year is expected to emphasise 'strengthening innovation, optimising structure, and reducing carbon consumption'. Stringent controls on refining, coal-to-methanol, and traditional coal chemical production capacities are likely to persist, while the expansion of ethylene, paraxylene (PX), and other chemical capacities will be scientifically regulated. Through the retrofitting of outdated facilities and AI-driven upgrades, the transformation of the petrochemical sector is expected to accelerate. Concurrently, 2026 may see modest high-end development, with breakthroughs in electronic chemicals and premium polyolefin materials driving import substitution and achieving early successes in green transformation.
The growth engines for China's chemical industry are expected to increasingly derive from structural product development and deeper international market engagement. Stable development in traditional sectors will continue to safeguard consumption demand for basic chemicals, while rising demand for high-end chemical products — such as premium coatings, modified plastics, and high-end polyolefins — will support sustained growth. Additionally, emerging industries including the low-altitude economy, humanoid robotics, and new energy are projected to drive rapid expansion for materials like lithium battery components, specialised engineering plastics, and high-end battery additives.
New Energy Sector to Sustain Double-Digit Growth
Analysts forecast that China's new energy sector may continue growing at over 15% in 2026. Advanced materials — including solid-state battery electrolytes, silicon-carbon anodes, and sodium batteries — are expected to reach a critical stage of industrialisation. Breakthroughs in sulphide solid-state battery technology may drive industrial-scale production beyond 50,000 tonnes by 2026, boosting solid electrolyte demand. Novel flame-retardant and functional electrolyte additives are also projected to see accelerated development.
The hydrogen fuel cell market share is expected to exceed 40%, with Chinese companies such as Dongyue Federation and Wuhan University of Technology New Energy contributing to cost reductions through innovations in perfluorosulfonic acid resin synthesis, thus expanding applications. Hydrogen storage materials are also anticipated to achieve widespread adoption.
In the photovoltaic sector, growth is projected to surpass 10%. Wider adoption of POE in encapsulation films and the rapid development of perovskite solar cells will drive demand for electron transport and hole transport layer materials. Key fine chemicals to monitor in the new energy sector include: POE, lithium difluorosulfonylimide, ethylene sulphate, lithium difluorobis(oxalate)phosphate, lithium difluoroborate, pyridine pyrophosphate, lithium manganese iron phosphate, lithium bis(trifluoromethanesulfonyl)imide, and lithium titanium aluminium phosphate.
Electronic Chemicals: Domestic Substitution and Product Upgrades
The semiconductor market is expected to grow by over 15% in 2026, with domestically produced materials increasingly replacing imports. Domestic production rates for KrF photoresist and CMP polishing slurry are projected to reach 35% and over 40%, respectively. Ultra-high purity reagents (Grade G5) for 12-inch wafers may exceed 50% self-sufficiency.
Electronic display materials are projected to maintain steady growth, driven by advances in photoresist developers and OLED emitting materials. Chinese companies, including Shanghai Xinyang and Jianghua Micro, are expected to accelerate domestic substitution, with photoresist developer production surpassing 35% and OLED light-emitting materials growing over 23%. Emerging PCB materials will continue to expand alongside the new energy vehicle and AI server markets, supporting annual PCB market growth above 4%.
Key fine chemicals in the electronic chemicals sector include hydrocarbon resin materials, electronic-grade phosphoric acid, electronic-grade sulphuric acid, electronic-grade hydrofluoric acid, silanes, nitrogen trifluoride, and tungsten hexafluoride.
High-End Pharmaceutical Intermediates: Accelerated Innovation and Globalisation
China's high-end pharmaceutical sector — including biopharmaceuticals, speciality APIs, and bespoke intermediates — is projected to grow robustly, with market expansion exceeding 25% by 2026. Policy support and technological innovation are expected to drive ‘zero-to-one' breakthroughs in innovative drugs, particularly in oncology, weight management, and autoimmune disease therapeutics.
Biopharmaceutical intermediates are expected to sustain growth above 13%, with strong demand for peptides and nucleotides and advancements in gene and cell therapies driving customised intermediates. The speciality API sector may surpass 1.1 million tonnes in production, with leading enterprises increasing market share through technological and scale advantages, reinforcing China's position in global supply chains.
Key fine chemicals to watch in the high-end pharmaceutical intermediates sector include nicotinamide mononucleotide, coenzyme A, chiral drug intermediates, 2-chloro-3-bromopyridine, 3-bromo-5-cyanopyridine, and peptide drug intermediates.
Industry Outlook: Supply-Side Reform and Green Transformation
Analysts suggest that 2026 may be the year when supply-side reforms yield tangible results. Following capacity optimisation, bulk chemical profitability is expected to bottom out and rebound. Market opportunities arising from the retirement of high-energy-consumption facilities in Europe and the U.S. could further improve the industry outlook compared with 2025. Fine chemicals are anticipated to achieve accelerated growth, supported by green processes and biosynthetic technologies, driving the industry towards environmental sustainability, intelligent manufacturing, and high-end specialisation.
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Post time: Jan-05-2026