Methane Chlorides Capacity Is Surplus

By Wen Yongxiang

Rapid capacity growth

Methane chlorides include methane monochloride, methane
dichloride, methane trichloride and carbon tetrachloride.
Ninety-nine percent of methane monochloride in China is used in
the production of silicone and methane polychloride. Production
units are mostly matched to silicone units and methane
polychloride units. After specialized carbon tetrachloride
units using the natural gas thermal chlorination process were
shut down before the end of 2005 due to the effectiveness of the
Montreal Protocol, carbon tetrachloride being sold in the market
is basically produced in methane polychloride units as a
byproduct. Methane chlorides mentioned in this article
thereafter do not include methane monochloride and carbon
tetrachloride.
   Except a 30 thousand t/a unit using the natural gas thermal
chlorination process still retained in Sichuan Honghe Fine
Chemical Co., Ltd., all others use the methanol process in the
production of methane chlorides. The capacity of methane
chlorides in China was 657 thousand t/a in 2005 and the output
was 472.6 thousand tons. The capacity of methane chlorides will
reach 877 thousand t/a in 2006, an increase of 33.5% over 2005.
The capacity is expected to be 1.457 million t/a in 2010.
   
Methane dichloride: The apparent consumption of methane
dichloride in China was 107.8 thousand tons in 2000 and reached
251.8 thousand tons in 2005 with an average annual growth of
18.5%. Methane dichloride is mainly used as pharmaceuticals,
pesticides, polyurethane foaming agent to replace CFC11 and
adhesive solvent to replace benzene and xylene. It can also be
used in metal cleaning and electric cleaning. It started to be
used as raw material for the production of refrigerant HFC32 in
recent years.

Methane trichloride: With the completion of more methane
chloride units, the output of methane trichloride in China has
increased rapidly in recent years and the import amount has kept
going down. The output of methane trichloride in China reached
264.6 thousand tons in 2005, the import amount was 236.6 thousand
tons and the apparent consumption was 501.2 thousand tons.
Methane trichloride is mainly used as raw material for the
production of HCFC-22. It can also be used in pharmaceutical and
pesticide sectors. The growth of air-conditioning and
industrial refrigerating equipment and fluorine plastic PTFE
(polytetrafluoroethylene) has promoted the development of
HCFC-22 and in turn the development of methane trichloride.

Unhealthy market competition

Since early 2006, the price of methane dichloride has been RMB1
200 - 1 900 per ton lower than the same period of 2005. The price
in June and July was RMB1 700 per ton and RMB1 900 per ton lower
than the same period of 2005. The drastic price drop led to
reduction of the import amount. The price of methane trichloride
presented a rising trend from January to July 2005 whereas it
had a declining trend from January to July 2006. The drop of the
market price has narrowed the profit space in producers.
   Major reasons for the market price reduction of methane
dichloride and methane trichloride in 2006 include the capacity
surplus, the fierce competition between producers and the
drastic price reduction of downstream products in the brisk
season.
   The average annual growth in China from 2006 to 2010 will
reach 7.2% for the consumption of methane chlorides and 17.3%
for the capacity. The operating rate of production units will
further reduce and the competition between producers will be
fiercer in the next 5 years.

Table 1  Major Methane Chloride Producers in 2006
(thousand t/a)
Producer                    Cpacity
Jiangsu Meilan Chemical Co.             260
Sichuan Honghe Fine Chemical Co.        130
Zhejiang Juhua Group                    140
Wuxi Green Apple Chemical Industry Co.    40
Shandong Dongyue Chemical Group Co.       80
Shandong Jinling Chemical Co.            120
Luzhou Xingfu Chemical Co.               30
Shandong Haihua Group                    40
Source: CNCIC Chemdata

Table 2  Supply and Demand of Methane Dichloride
                 in China in Recent Years     (thousand tons)
Year    Output    Import    Export    Apparent consumption
2000    21.6    86.3    0.1     107.8
2001    36.9    63.8    0.1     100.6
2002    49.8    38.2    1.7     86.3
2003    98.0    65.4    2.8     160.6
2004    130.0    60.4    -       190.4
2005    208.4    48.0    4.6     251.8
Source: CNCIC Chemdata

Table 3  Supply and Demand of Methane Trichloride
              in China in Recent Years    (thousand tons)
Year    Output    Import    Export    Apparent consumption
2000    37.1    103.3    -       140.4
2001    58.9    132.4    -       191.3
2002    59.3    141.8    1.4     199.7
2003    112.4    212.6    0.1     324.9
2004    160.0    239.5    -       399.5
2005    264.6    236.6    -       501.2
Source: CNCIC Chemdata