Adipic Acid Is Short of Supply

By John Zheng
Adipic acid is an important organic chemical raw material.
Adipic acid in China is mainly used as raw material for the
production of nylon 66 salt, polyurethane and plasticizers.
Besides, it is also used in high-grade lube oils and food
additives.
   By February 2006 the total capacity of adipic acid in China
was around 250 thousand t/a and the output in 2005 was around
176 thousand tons. Major producers include CNPC Liaoyang
Petrochemical Company Ltd. and Shenma Group. Besides, there are
also some small producers with a capacity of less than 1 thousand
t/a such as Taiyuan Chemical Plant. CNPC Liaoyang Petrochemical
Company Ltd. is the largest producer in China today and its
capacity is 140 thousand t/a. With the completion of the 50
thousand t/a unit in 2005, the capacity of adipic acid in Shenma
Group reached 107 thousand t/a. Adipic acid produced in CNPC
Liaoyang Petrochemical Company Ltd. is sold as commodity. Adipic
acid produced in Shenma Group is totally for the
self-consumption in the nylon 66 salt production with no sales
in the market.
   With the rapid development of the polyurethane sector in
China, the consumption distribution of adipic acid in China has
also changed greatly in recent years. Adipic acid was mainly used
to produce nylon 66 salt in the past. Since 2001, however, the
application in the polyurethane sector has expanded rapidly. The
consumption of adipic acid in China was around 315 thousand tons
in 2005. The largest consumption sector is the polyurethane
sector and the consumption accounted for around 63.2% of the
total. The consumption proportion was around 33.8% for the nylon
66 salt production and around 3% for other sectors.
    The demand of adipic acid in China is growing rapidly and
the output falls far short of the market demand. Import has to
be made to bridge the deficit. The import amount has increased
rapidly in recent years and reached 174 thousand tons in 2004.
The average annual growth of the import amount was around 46%
from 1999 to 2004. The completion of the 70 thousand t/a adipic
acid unit in CNPC Liaoyang Petrochemical Company Ltd. in
November 2004 (CCR2004, No. 35) eased the supply deficit to a
certain extent and the import reduced in 2005. The import of
adipic acid in China has extensive channels. Major import
sources in 2005 included Korea, Japan, Singapore, Germany,
Ukraine and the United States. The amount imported from these
6 countries accounted for around 80% of the total.
   The consumption of adipic acid in the polyurethane sector was
199 thousand tons in 2005. It is expected that the demand of
adipic acid in the polyurethane sector will increase at an
average annual rate of around 10% in the next few years and reach
around 320 thousand tons in 2010.
   Nylon 66 salt in China is mainly used to produce nylon 66 fiber,
nylon 66 tire cord fabric and non-woven fabric. The average
annual growth of the tire cord fabric demand reached more than
30% from 2002 to 2005. It is expected that the average annual
growth of the adipic acid demand in nylon 66 salt production will
maintain at around 12% in the next few years. The consumption
of adipic acid in nylon 66 salt production was 106 thousand tons
in 2005 and is expected to reach around 187 thousand tons in 2010.
   The consumption of adipic acid in other sectors was around
10 thousand tons in 2005. It is expected that the demand of adipic
acid in other sectors will maintain an average annual growth of
10% and reach around 16 thousand tons in 2010.
   The total demand of adipic acid in China is therefore expected
to be around 523 thousand tons in 2010.
   Owing to the rapid demand growth in the adipic acid market,
many companies plan to expand or construct adipic acid units.
Besides the expansion of production units in CNPC Liaoyang
Petrochemical Company Ltd. and Shenma Group during the period
from 2004 to 2005, quite a few firms also plan to construct new
adipic acid units. A 50 thousand t/a unit in Taiyuan Chemical
Plant will be completed in 2006. A 70 thousand t/a unit in
Xinjiang Dushanzi Tianli High-tech Co., Ltd. will start
production in 2007. CNPC Liaoyang Petrochemical Company Ltd.
plans to start the third-phase expansion project to increase the
capacity to 250 thousand t/a. If these projects can be completed
on schedule, the capacity of adipic acid in China will reach 480
thousand t/a. Even at that time the output still can not meet
the domestic market demand, but the self-sufficiency rate of
adipic acid in China will increase.