Rapid Expansion of Chloroacetic Acid Capacity   

By Li Qiong   

Drastic reduction of exports in 2008  

The constant demand growth of chloroacetic acid in the domestic market has promoted the rapid development of the chloroacetic acid sector in China in recent years. The average annual capacity growth of chloroacetic acid reached 15.8% from 2002 to 2008. Export activity has also increased rapidly. The average annual export volume growth of chloroacetic acid and its salts and esters was 35.1% from 2002 to 2007. With impacts from the global financial crisis, the amount of chloroacetic acid exported from China was 10 500 tons in 2008, a drop of 39.3% from 2007. By the end of 2008 there were already more than 100 chloroacetic acid producers in China. Major producers include Hebei Donghua Chemical Group, Akzo Nobel Chloroacetic Acid Chemical (Taixing) Co., Ltd., Wuxi Greenapple Chemical Industry Co., Ltd., Hebei Shijiazhuang Synthesis Chemical Plant, Shijiazhuang Hengyi Chemical Co., Ltd. and Shandong Huayang Science and Technology Co., Ltd. The total capacity is 550 000 t/a. The output was around 330 000 tons and the consumption was around 330 000 tons in 2008. In terms of production process, the capacity using the acetic anhydride process accounted for around 31.2% and the capacity using the sulfur process accounted for around 68.8%. Producers are mainly located in Hebei province, Jiangsu province, Henan province, Shandong province, Chongqing and Sichuan province. Small average scale and fierce regional competition have restricted the sound development of the chloroacetic sector in China. For example, the capacity of chloroacetic acid in Hebei accounts for more than 40% of the national total. There are more than 20 producers in the province, but fewer than 10 of them have a capacity of over 10 000 t/a.

Stable growth of downstream demand

Chloroacetic acid is extensively used in the pesticide, pharmaceutical, dyestuff, oilfield chemical, papermaking, food and textile sectors. The demand for chloroacetic acid in pesticide intermediates, carboxymethyl cellulose and organic synthesis is quite big. It is expected that the consumption of chloroacetic acid in China will grow steadily at an average annual rate of 5% from 2009 to 2012.

    1. Pesticides
The pesticide sector is a major consumer of chloroacetic acid in China. Chloroacetic acid can be used to synthesize more than 20 varieties of insecticides, herbicides and plant growth regulators that are in popular use. The variety with the biggest consumption of chloroacetic acid is glyphosate. The output of glyphosate in China has increased rapidly in recent years and China has become the leading glyphosate producer in the world. As insecticides are mostly traditional varieties, the growth of demand for chloroacetic acid is relatively slow. The demand for chloroacetic acid in herbicides and plant growth regulators will however maintain a rapid growth. The consumption of chloroacetic acid in this sector was around 109 000 tons in 2008. It is expected that the average annual growth of chloroacetic acid demand in this sector will be around 4% from 2009 to 2012.

2. Carboxymethyl cellulose
The production of carboxymethyl cellulose started rather late in China but developed rapidly in recent years. Quite a few carboxymethyl cellulose producers expanded capacity in 2005. Foreign companies have also made investments and constructed plants in China. Besides, some daily chemical, textile and oilfield chemical producers in China also plan to construct carboxymethyl cellulose units. The consumption of chloroacetic acid in this sector was around 83 000 tons in 2008. It is expected that the average annual growth of chloroacetic acid demand in this sector will be more than 7% from 2009 to 2012.

3. Pharmaceuticals
In the pharmaceutical sector chloroacetic acid is mainly used to produce vitamins and hormone medicines. The vitamin sector in China has developed rapidly in recent years and China has become a major vitamin producer and exporter. The export of vitamins has bright prospects. The consumption of chloroacetic acid in the pharmaceutical sector was around 22 000 tons in 2008. It is expected that the average annual demand growth of chloroacetic acid in this sector will be maintained at around 6% from 2009 to 2012.

4. Others
Owing to its unique chemical structure, chloroacetic acid can participate in many chemical reactions. A great number of fine chemical intermediates such as malonic acid, malononitrile, mercaptoacetic acid and aminoacetic acid can be derived by using chloroacetic acid as raw material. Besides, chloroacetic acid can also be used to synthesize surfactants, softening agents, lime soap dispersants, daily chemical protective agents and plastic assistants. The demand for chloroacetic acid in other sectors is relatively stable. The consumption of chloroacetic acid in other sectors was around 80 000 tons in 2008. It is expected that the average annual demand growth of chloroacetic acid in other sectors will be around 5% from 2009 to 2012.
   The development of the chloroacetic acid sector in China is quite mature today, but there are still many problems. On the one hand, foreign companies with considerable strength have constantly expanded capacity and local chlor-alkali enterprises are actively seeking the expansion of the chlorine product chain and planning to launch chloroacetic acid projects. On the other hand, numerous small chloroacetic acid producers purchase raw materials totally from outside sources. With drastic price fluctuations of raw materials, their market competitiveness is weakened. Besides, the sulfur process and the acetic anhydride process cannot show difference in value in the domestic market. Chloroacetic acid produced with the acetic anhydride process has high purity and good quality. It has a remarkable advantage in overseas markets, but the market price of chloroacetic acid produced with the acetic anhydride process is no higher than the market price of chloroacetic acid produced with the sulfur process in China. Moreover, the amount of chloroacetic acid exported from China only accounts for around 3% of the output today.
   Through many years' development, China has already become a major chloroacetic acid production country in the world. There is oversupply in the domestic market. Faced with fiercer market competition, some producers with small scale and outdated technology will be eliminated.
   Domestic enterprises should therefore try their best to ensure the supply of raw materials. While upgrading the technical level and enlarging the production scale, they should strengthen the development of downstream products and form the production and operation mode of upstream/downstream integration to promote the sound development of the chloroacetic acid sector in China.