Epoxy Resin Is in Short Supply    

By John Zheng

Capacity surplus in the world

The production and the consumption of epoxy resin in the world are mainly distributed in Western Europe, the United States and Japan. The capacity of epoxy resin in the world (excluding China) was 1.80 million t/a in 2005 and the consumption was 1.20 million tons. The total capacity and the total consumption in Western Europe, the United States and Japan exceed 1.20 million t/a and 800 thousand tons respectively, both accounting for two thirds of the world total.
   Major epoxy resin producers in the world include Resolution, Dow Chemical and Vantico. The total capacity of these 3 producers accounts for around 50% of the world total.
   Epoxy resin in advanced countries features well-developed application technologies and very extensive application sectors. The demand of epoxy resin in high-grade coatings accounts for more than a half of the total.
   The consumption of bisphenol A varieties accounts for more than 80% of the total consumption, and the consumption of brominated bisphenol A varieties and phenolic aldehyde varieties comes next. The consumption of other special varieties is relatively small but has grown rapidly in recent years. The capacity of epoxy resin in the world is already in serious surplus. It is expected that the average annual growth of the epoxy resin demand in the world will be 3% during 2006-2010, and the growth will be 2.0%, 2.5% and - 0.5% respectively in the United States, Western Europe and Japan.

Supply deficit in China

The capacity of epoxy resin in China was 108 thousand t/a in 2000, the output was 100 thousand tons and the consumption was 217 thousand tons. The capacity, the output and the consumption increased to 491 thousand t/a, 370 thousand tons and 552 thousand tons respectively in 2005 with an average annual growth of 35.4%, 29.9% and 20.5%.
   Consumption sectors for epoxy resin in China are basically identical to foreign countries. It is mainly used in coatings, composite material, electronic/electric and adhesive sectors.
   Despite a rapid output growth of epoxy resin in China, the supply gap is still widening and the import amount is also increasing constantly. The net import amount of epoxy resin in China was 117.1 thousand tons in 2000 and increased to 182 thousand tons in 2005. The net import amount was 133.8 thousand tons from January to August 2006 and is expected to be more than 200 thousand tons in the whole year of 2006. The worldwide price rise of raw materials has caused price rise and constant import cost increase of epoxy resin in recent years.
   The ingoing of great quantities of end users in the world has also promoted a rapid demand growth of epoxy resin in China. According to the projection made by Dow Chemical, the demand of epoxy resin in China will maintain a two-digit average annual growth before 2010 and the consumption will reach 0.9 million-1.0 million tons in 2010.
   The demand of epoxy resin in Asia was around 750 thousand tons in 2005 and the total capacity was close to 1.20 million t/a. The surplus capacity is mostly distributed in peripheral countries of China. It will therefore pose a severe challenge to the development of the epoxy resin sector in China.

Table 1  Major Epoxy Resin Producers in China in 2005  (thousand t/a)
Producer    Capacity
Guangdong Hongchang Electronic Material Co.      65
Guangdong Kingboard Chemical Holdings Ltd.       45
Dow Chemical (Zhangjiagang) Co.                 41
Epoxy Resin Plant of Baling Petrochemical Co.    25
Wuxi Resin Plant of Bluestar New Chemical Materials Co.    25
Dalian Qihua Chemical Co.                       20
Kuldo Chemical (Kunshan) Co.                    40
Yixing Sanmu Group                              26
Wuxi Dic Epoxy Resin Co.                        15
Guangdong Ciba-Geigy Polymer Chemical Co.       10
Tianjin Yujin Chemical Industrial Co.           5.5
Source: CNCIC Chemdata

Table 2  Supply and Demand of Epoxy Resin in China
                  in Recent Years          (thousand tons)
Year    Output    Import    Export    Consumption
2000    100     134     17      217
2001    150     126     12      264
2002    200     162     20      342
2003    288     198     36      450
2004    300     259     59      500
2005    370     260     78      552
Source: CNCIC Chemdata