Fierce Competition in the MMA Market
Year:2007 ISSUE:30
COLUMN:MARKET REPORT
Click:317    DateTime:Oct.23,2007
Fierce Competition in the MMA Market    

Methyl methacrylate (MMA) is an important organic chemical raw material and chemical product. It is mainly used in the production of polymethyl methacrylate (PMMA) and ACR and MBS - impact assistants for PVC modification. It can also be used as the second monomer for the production of acrylic fiber, ion exchange resin, paper glossing agent, textile dyeing/printing assistant, leather treatment agent and lube additive. Therefore, MMA has very extensive applications.

Stable growth of consumption

By the end of 2006 the capacity of MMA in China reached 298 000 t/a (excluding the capacity of MMA from the cracking of waste PMMA). The output of MMA was around 243 000 tons in 2006. PetroChina Jilin Petrochemical Co., Ltd. is one of the major MMA producers in China and its total capacity of its three units is 78 000 t/a. The company planned to expand its MMA capacity to 128 000 t/a in 2006, but no progress has been made so far.
   Besides, China has more than 500 small MMA producers using the cracking process. The total amount of cracked MMA was around 120 000 tons in 2006. The import amount of MMA in China also stably grew from 2000 to 2004. It increased from 52 500 tons in 2000 to 84 000 tons in 2004. With the completion of MMA units in Shanghai Lucit International and Mitsubishi Rayon, the import amount of MMA started to go down from 2005. The net import amount was 6 000 tons only in 2006.
   In the 1970s almost all MMA in China was used in the production of PMMA cast-molded plates. Through widening applications for many years, MMA is already used in non-resin processing sectors such as surface coatings, adhesives, ACR and MBS, textile sizing agents, medical polymer materials and leather assistants. The application sectors of MMA keep constant expansion.
   The consumption distribution of MMA in China in 2006 was 60% for PMMA, 12% for plastic processing assistants ACR and MBS, 23% for surface coatings and 5% for others.

Fierce competition
in the Chinese market

Because of the brisk domestic demand, foreign producers have quickened their steps in constructing MMA production units in China. The 90 000 t/a MMA unit constructed by Lucit International (China) Chemical Co., Ltd. in Shanghai went on stream in 2005. (CCR2005, No. 18) The 70 000 t/a MMA production unit constructed by Mitsubishi Rayon in Huizhou, Guangdong province went on stream in 2006. (CCR1006, No. 25)
   In early April 2007 the National Development and Reform Commission approved Evonik Degussa to invest 250 million Euros and construct an integrated project of MMA and methacrylic special chemicals in Caojing of Shanghai. The project uses C4 technology, the nameplate capacity of this MMA unit is 100 000 t/a and production will be started in 2009.
   Due to the constant investment made by foreign giants in the MMA sector in China, the competition in the domestic market will become fiercer in future. Foreign producers mostly select regions with developed MMA downstream sectors as sites for their investment, mainly eastern China and southern China. In this way the logistics cost can be reduced and the market competitiveness can be enhanced. Domestic MMA producers with considerable scale are however mainly concentrated in Jilin and Heilongjiang provinces, northern China, forming an unbalanced mode of production in the north and consumption in the south. Domestic MMA enterprises should therefore develop downstream products and form large-scale operation to promote the development of the MMA sector.

     Major MMA Producers in China in 2006
          (thousand t/a)
Producer                                                                                                          Capacity
Heilongjiang Longxin Chemical Co., Ltd.
     24
Fushun Jite Chemical Co., Ltd. of PetroChina Jilin Petrochemical Company
    16
Suzhou Anli Chemical Plant of PetroChina Jilin Petrochemical Company
    12
Acrylonitrile Plant of PetroChina Jilin Petrochemical Company
    50
Shanghai Zhibi Chemical Factory
    6
Lucit International (China) Chemical Co., Ltd.
    90
Mitsubishi Rayon Co., Ltd. (Guangdong)
    70
Source: CNCIC