On the morning of April 23rd, in Wutongqiao District, Leshan City, Sichuan Province, new pipelines extended throughout the integrated industrial park of Fuhua Advanced Materials. With the official completion of the 200,000-ton industrial-grade hydrogen peroxide project by Zhongfu Taihua and the 20,000-ton special-grade hydrogen peroxide project by Evonik Fuhua, a "over-the-fence supply" micro-ecosystem for the chemical industry was showcased. This joint venture project, built by German specialty chemicals company Evonik Industries AG and local chemical enterprise Fuhua Chemical, utilizes byproduct hydrogen from Fuhua Chemical's existing chlor-alkali plant. After conversion into industrial-grade hydrogen peroxide, it is directly piped to the adjacent special-grade hydrogen peroxide unit for deep purification. Commercial supply of the related products is planned to commence in the first half of this year.
The commissioning of this capacity coincides with a period of transition for China's petrochemical and chemical industry, shifting from scale expansion to structural adjustment. As the initial year of the 15th Five-Year Plan period begins, there is industry-wide consensus on addressing "cut-throat" competition. The sector faces a structural contradiction between overcapacity in basic products and insufficient supply of high-end new materials. Against this backdrop, the extension from basic industrial-grade hydrogen peroxide to special-grade hydrogen peroxide used in fields like photovoltaics and semiconductors represents both a market-driven move by companies seeking higher-value business increments and an industrial evolution towards regional capacity coupling from primary resource processing to the entire electronic chemicals supply chain.
Data on the current supply-demand fundamentals of the domestic chemical industry shows that in the fourth quarter of 2025, the capacity utilization rate for China's chemical raw materials and chemical products manufacturing sector was 74.1%, slightly below the national average for large-scale industrial enterprises. A work plan for stabilizing growth in the petrochemical and chemical industry, issued by seven departments including the Ministry of Industry and Information Technology, points to intensified competition in basic organic raw materials and insufficient supply of high-end fine chemicals as the primary constraints on improving industry development quality and efficiency. Industry data indicates that China still relies on imports for some key strategic materials, with high import dependency persisting in segments such as semiconductor-grade epoxy resins and high-end electronic chemicals.
The supply-demand structure of the hydrogen peroxide market reflects these industry characteristics. According to market research data, the global hydrogen peroxide market was valued at approximately $3.95 billion in 2026 and is projected to reach $5.74 billion by 2033, growing at a compound annual growth rate of 5.5%. In terms of product structure, industrial-grade hydrogen peroxide with a concentration around 35% constitutes the major market volume, primarily used downstream in traditional industries like pulp bleaching, textile dyeing, and wastewater treatment, where supply is relatively ample. However, with capacity expansion in photovoltaic panel manufacturing, semiconductor wafer cleaning, and aseptic packaging for food and beverages, demand for high-purity special-grade (electronic-grade/food-grade) hydrogen peroxide is trending upwards. Compared to other chemical reagents, special-grade hydrogen peroxide decomposes only into water and oxygen, meeting the stringent control requirements for residues and environmental standards in downstream advanced manufacturing.
In response to growing demand in the specialty chemicals market, chemical companies are making targeted adjustments in capacity expansion and supply chain design, moving from traditional extensive production models to highly integrated upstream-downstream "over-the-fence" physical supply models. The recently completed Leshan hydrogen peroxide project serves as an example. For raw material sourcing, the project departs from the traditional practice of relying on external procurement of basic chemicals by directly utilizing byproduct hydrogen from Fuhua Chemical's 500,000-ton per year chlor-alkali plant, enabling on-site conversion and utilization of the hydrogen byproduct. In the primary production stage, the project incorporates Evonik's fluidized bed technology to build 200,000 tons of industrial-grade hydrogen peroxide capacity, aiming to control energy consumption per unit of product.
This highly efficient "over-the-fence" supply and cost control at the micro level is fundamentally supported by the region's macro-level resource endowment and supporting infrastructure. As the host location for this project, Leshan City in Sichuan Province possesses proven reserves of 11.7 billion tons of rock salt, approximately 1.5 billion tons of phosphate rock, and forecasted resources exceeding 500 billion cubic meters of natural gas (shale gas), long establishing it as a significant national base for salt and phosphorus chemical raw materials. To promote industrial value-added enhancement, the Sichuan Provincial Department of Economy and Information Technology issued the "Implementation Plan for Sichuan Province's Green Phosphorus Chemical Industry Cluster" in 2024, designating Leshan as one of the core areas for the province's green phosphorus and salt chemical industry clusters. According to data and plans disclosed by the Leshan municipal government, the city's green chemical industry output value in 2024 was 27.992 billion yuan, with targets set to reach 60 billion yuan by 2027 and exceed 100 billion yuan by 2029.
Faced with the market gap created by this shift from basic chemicals to high-value-added sectors, multinational chemical giants and domestic industry leaders are concurrently adjusting their strategic layouts. The completed Evonik Fuhua hydrogen peroxide project is a typical example. It breaks from the previous practice of inefficiently combusting byproduct hydrogen, eliminating the high risks and costs associated with long-distance hazardous chemical transportation through "over-the-fence supply," thereby forming an integrated chain that combines technological barriers with local resource advantages. This logic of extreme integration and breaking into high-end markets is being frequently validated in the strategic layouts of major chemical companies in 2026. In March of this year, multinational chemical giant BASF achieved full operational status at its world-class integrated production base in Zhanjiang, Guangdong, which not only features large-scale production of performance chemicals but also operates using 100% renewable electricity. Similarly, earlier this year, domestic chemical leader Wanhua Chemical completed the technical upgrade and resumed production of its million-ton-scale units in Ningbo and Yantai, explicitly stating its focus on driving leapfrog development in "secondary main businesses" such as battery materials and semiconductor materials. Rongsheng Petrochemical is also accelerating the release of high-end new material capacity, including polycarbonate (PC), leveraging its 40-million-ton per year green refining and chemical integration project.
Beyond Evonik's investment in Leshan, Sichuan, other multinational chemical companies have made similar high-end capacity investments in China. For instance, in January 2024, Belgian chemical giant Solvay announced an expansion of its hydrogen peroxide capacity in Shandong Province, planning to achieve an annual production of 48,000 tons of photovoltaic-grade hydrogen peroxide by 2026 to support the domestic solar panel manufacturing supply chain. These concentrated moves by industry giants clearly outline the core trajectory of the current industrial chain restructuring: breaking into high-end segments like electronic chemicals and key strategic materials to escape low-end price wars; consolidating cost advantages and enhancing market influence through deep vertical integration; and simultaneously adopting green, low-carbon processes as a critical threshold aligning with global supply chain准入 standards.