Demand for Bromine Flame-Retarding Agents Grows Steadily

China's production and utilization of bromine flame-retarding
agents already has a history of over 30 years. More than 70
bromine flame-retarding agents are being produced today. The
most important varieties include decabromodiphenyl oxide,
tetrabromobisphenol A and hexa-bromocyclododecane. The output
of the first two varieties accounts for around 50% of the total.
   Bromine flame-retarding agents have the advantages of "the
smallest addition amount and the greatest effectiveness". They
are halogen organic flame-retarding agents with the greatest
consumption in the world. Worldwide consumption is around 300
thousand tons a year today, accounting for more than 20% of the
total usage of all flame-retarding agents.

1   Consumption in the world

The sales amount of flame-retarding agents in the 3 major markets
- the United States, Europe and Asia - was around 1.48 million
tons in 2004 and the sales value was US$2.8 billion - 2.9 billion.
It is expected that the average growth of sales in the 3 major
flame-retarding agent markets will be 3.0% -3.3% annually from
2004 to 2009.
   Bromine flame-retarding agents are organic flame-retarding
agents with the greatest consumption in the world. Their share
of total flame-retarding agent consumption was 14.3% in 1998,
14.6% in 2003 and 21.0% in 2004. They accounted for 32.5% of the
total sales value of flame-retarding agents in 2004.
   The high requirements for environmental protection and
health in the past decade had huge impacts on the development
of halogen flame-retarding agents. Particularly in advanced
countries, halogen flame-retarding agents are only growing
slowly. Non-halogen flame-retarding agents such as inorganic
flame-retarding agents, aluminum hydroxide and magnesium
hydroxide in particular, have therefore new opportunities for
rapid development.
   It is expected that the consumption growth of bromine
flame-retarding agents will slow down worldwide and healthier
alternatives will increase constantly.

2  Production and consumption in China

In China flame-retarding agents have become the leading polymer
modifiers second only to plasticizers. The capacity to produce
flame-retarding agents is around 200 thousand t/a, while output
is 150 thousand-170 thousand tons and consumption is around 200
thousand tons today. The supply gap is mainly bridged by imports
from the United States and Israel. Major import varieties are
organic bromine and halogen-phosphorus flame-retarding agents.
   There are presently more than 60 producers of flame-retarding
agents in China. More than 50 varieties can be produced, with
the major products being bromine and phosphorus formulas.
Bromine flame-retarding agents are the most important varieties,
accounting for around 30% of all organic flame-retarding agents
in China. Production capacity of bromine flame-retarding agents
was around 86 thousand t/a, while output was around 40 thousand
- 50 thousand tons and the self-sufficiency rate was around 80%
in 2005. It is expected that demand for bromine flame-retarding
agents in China will reach 70 thousand - 87 thousand tons in 2010
with an average annual growth of around 7%.
   Production of bromine flame-retarding agents is distributed
in Shandong and Jiangsu provinces. Major products include
decabromodiphenyl oxide, tetrabromobisphenol A, octabromoether,
decabromodiphenyl ethane, and hexabromocyclododecane,
brominated epoxy resin and brominated polystyrene.

    2.1 Decabromodiphenyl oxide
Decabromodiphenyl oxide is suitable for use in polyethylene,
polypropylene, ABS (acrylonitrile-butadiene-styrene), epoxy
resin, PBT (polybutylene terephthalate), silicone resin, EPDM
(ethylene-propylene non-conjugated diene rubber), polyester
fiber and cotton fiber. It is the variety of bromine
flame-retarding agents that is in greatest demand. As Europe has
not included it in the RoHS decree (the Decree for Prohibiting
the Use of Some Hazardous Substances in Electronic/Electric
Equipment), it will continue to be used in the near future. The
output of decabromodiphenyl oxide in China is around 15 thousand
tons a year today. The exported amount will not change greatly
in the next few years. There will therefore be an oversupply in
the domestic market.
   China's capacity for producing decabromodiphenyl oxide is
estimated to be around 36 thousand t/a.

    2.2 Tetrabromobisphenol A
The major reactive flame-retarding agent produced in China is
tetrabromobisphenol A. Products produced through bromination
with imported bisphenol A as raw material have better properties
and higher prices than products using domestic bisphenol A as
raw material.
   Reactive tetrabromobisphenol A is used to produce
flame-retarding resins such as bromine-containing epoxy resin,
bromine-containing polycarbonate and bromine-containing
phenolic resin. It can also be added into epoxy resin, phenolic
resin, high impact polystyrene, ABS, AS (acrylonitrile-styrene),
unsaturated resins and polyurethane. The capacity of
tetrabromobisphenol A in China is estimated to be around 18
thousand t/a.

    2.3 Octabromoether
The quality of octabromoether produced in China is similar to
foreign products. But unlike granules in foreign countries, most
of what is produced in China is in powder form, so improvements
in product form still have to be made. Production capacity of
octabromoether in China is estimated to be around 8 thousand t/a.

    2.4 Hexabromocyclododecane
Hexabromocyclododecane has excellent heat stability and
free-running property. It is mainly used in polystyrene foam,
high impact polystyrene, adhesives and coatings. Improvements
in the particle size and evenness of domestic products have to
be made. The capacity to make hexabromocyclododecane in China
is estimated to be around 7.5 thousand t/a.

    2.5 Decabromodiphenyl ethane
Disputes over the use of decabromodiphenyl oxide have forced
flame-retarding agent researchers both at home and abroad to
search for substitutes. Albemarle Corp. of the United States
took the lead and proposed the decabromodiphenyl ethane
production process. The pilot for commercial production in China
was achieved at the end of 2004 and the product was put on market
in 2005. The molecular weight and the bromine content of
decabromodiphenyl ethane are similar to decabromodiphenyl oxide
and their flame-retarding properties are therefore basically
the same. But resistance to heat, light and dialysis is better
in decabromodiphenyl ethane than in decabromodiphenyl oxide.
Plastics using decabromodiphenyl ethane can be recovered for
reuse - an outstanding advantage that other bromine
flame-retarding agents do not have. China started batch
production of decabromodiphenyl ethane in 2005 and the price of
imported products has therefore been reduced drastically by 50%.
The price of decabromodiphenyl ethane today is around RMB2 800
per ton higher than decabromodiphenyl oxide. Owing to its
excellent properties and features, decabromodiphenyl ethane has
bright prospects in both domestic and overseas markets for
flame-retarding agents. China's capacity to make
decabromodiphenyl ethane is estimated to be around 11 thousand
t/a.

 &n