In 2024, the Company's chemical business showed momentum for improvement, with enhanced operational resilience, significant cost reduction and efficiency gains.

We strengthened safety and environmental foundations.

We advanced special programs for hazardous chemical safety,  and completed inspections of aging equipments, liquid hydrocarbon tank farm, and high-risk sectors. We reinforced strict contractor qualification standards and risk controls to achieve improvement in safety performance. In terms of green development, we invested 1.38 billion yuan in environmental upgrades, achieving substantial reductions in COD, ammonia nitrogen, sulfur dioxide, and nitrogen oxide emissions. Meanwhile, we reduced freshwater intake by 3.5% and increased wastewater reuse by 9.9%. In 2024, we implemented 48 energy efficiency improvement projects, saving 97,000 tonnes of coal equivalent. Record-low energy consumption levels for ethylene, paraxylene (PX), power supply, and oxygen products were achieved.

We yielded cost reduction and efficiency gains effect.  To achieve feedstock optimization, we increased the use of lighter, diversified, and low-cost feedstock, with ethane up by 1.5 percentage points, and light hydrocarbons up by 1.1 percentage points. We capitalized on market opportunities, saving 220 million yuan through low-cost naphtha imports. We carried out stringent cost control through optimizing fuel mix, reducing fuel expenses, and adjusting coal inventory in accordance with its price movements. For long-term shut-down facilities, we cut maintenance costs and outsourcing expenses. We reduced cost by 6.8% in 28 key items.

We deepened production-sales-research synergy.

We strived to increase production and profitability by maintaining high utilization rates for aromatics and raising ethylene utilization rate to 90% along with the product chain margins improved. We increased output of profitable products by 870,000 tonnes, generating 520 million yuan in added profit. We reduced non-target synthetic resin production by 78,000 tonnes, a decrease by 12.5%, boosting profit by 58.65 million yuan. Minus-margin facility adjustments were further undertaken. We cut output from minus-margin facilities by 5.9 million tonnes, reducing loss by 2.1 billion yuan through fine-tuned margin assessment by product chains, facilities and subsidiaries. We adopted customer-centric approach to optimize product mix. We increased the proportion of high value-added products of synthetic materials, fine chemicals by 1.5 percentage points while strengthening customer service and tailored product development. We produced 172,000 tonnes of customized products and added 37.11 million yuan in profit and promoted a technical service + customization model. We achieved 82.5% sales growth in specialty products, (e.g., anti-tiger stripes PP, TPO, electrical films) contributing to 71.17 million yuan in incremental profit. We constantly innovated business models, leveraging futures hedging to lock in processing margins and stabilize raw material costs and product prices. We tapped the potential of international operation and specialized reform of logistics with overseas sales volume rising 15.3% (exports up by 13.8%). The share of business volume within Sinopec Group rose by 27.4 percentage points, further supporting the Company's core operations. We reduced logistics costs by 14 yuan/tonne through scaled and specialized logistics, saving 630 million yuan annually.

Coal Chemicals

Continued operational excellence in coal chemical business.  In 2024, the Company's major coal chemical products reached 14.51 million tonnes, with a total business volume of 4.42 million tonnes. Output of key products such as BDO, PVA, acetic acid, methanol, and polyolefins hit record highs. PTMEG maintained a leading domestic market share. Sales of high value-added products totaled 43,500 tonnes, enabling import substitution in advanced fields such as 3D printing materials. The sector successfully developed five new PVA grades, high-impact SP179 material for new energy applications, and customized products like "Tuduoduo." For the first time, gas-liquid process polyethylene grades for stretch film (182WA and F1815) were produced, increasing the market share of premium polyolefin products by 2 percentage points year-on-year. Six new product grades, including LD150 and LD100-X, underwent trial production, while gasifiers achieved a record-breaking 103 days of continuous operation, the longest since commissioning.

Strategic planning and project execution in good progress.  We secured approval for modifications for the Dalu coal-toolefins project, completed its environmental impact assessment (EIA) report, and advanced construction preparations. Besides, we finalized exploration engineering and report filing for the Bayan Chaidamu coal mine project, obtaining NDRC approval to adjust its annual production capacity to 12 million tonnes. The overall design for the decarbonization upgrade of Zhongtian Hechuang was approved, and basic engineering and procurement of long-lead equipment were kicked off. For the green hydrogen project, we completed equity acquisition, finalized basic design, and secured permits for 30,000 tonne/year of green hydrogen production, obtained 686.8 MW of renewable energy quotas, with 20% of total power generation allowed to connect to the grid, and construction commenced on-site. For the Guizhou energy & chemical project, site preparation was completed and construction plans finalized, while approval for 1-million-tonne/year methanol project was secured and its feasibility study completed. We revised the feasibility study for Xinjiang Zhundong coal-to-gas project, a 4-billion m³/year project (Phase I: 2 billion m³/year), and extended exploration rights for the Zhundong Daqinggou and Dajingnan coal resources for the fifth time.