Stable Growth of the Adipic Acid Demand    
By Li Yufang  

Evident reduction of import volume in 2008

Adipic acid production in China started rather late, but development has been rapid. Today China has 605 000 t/a of adipic acid capacity. Major producers include PetroChina Liaoyang Petrochemical Co., Ltd., China Shenma Group Co., Ltd. and Shandong Hongye Chemical Industry Group Co., Ltd. Output was 250 000 tons in 2008, an increase of 19% over 2007.
   As the domestic output cannot meet the market demand, large quantities have to be imported each year. According to customs statistics, the import volume was 278 000 tons in 2007, being the highest in history and an increase of around 52.5% over 2006. With impacts from the global financial crisis, the domestic demand was down in 2008. As several units in China were also completed and put on stream, the domestic output was increased. The import volume therefore fell drastically to 162 000 tons in 2008, a drop of 41.6% from 2007. The import volume in the first nine months of 2009 was 73 000 tons, a drop of 47.9% from the same period of 2008. Adipic acid imported from abroad is mainly used to produce polyurethane.
   China also exports small quantities of adipic acid and the amount exported from China was 2 500 tons in 2008.

Rapid growth of capacity

As adipic acid has a considerable supply gap in China and producers' profits are fat, many enterprises have been attracted to invest in the adipic acid sector.
   PetroChina Liaoyang Petrochemical Co., Ltd. is planning to conduct the third-phase expansion and construct a 160 000 t/a adipic acid unit to bring the total capacity to 300 000 t/a and maintain its leading position in the adipic acid sector in China. China Shenma Group Co., Ltd. is planning to expand the capacity of its existing adipic acid unit to 160 000 t/a. Taiyuan Chemical Industry Co., Ltd. is planning to expand its adipic acid capacity to 50 000 t/a. If these construction and expansion plans are fulfilled on schedule, the total capacity of adipic acid in China is expected to reach around 900 000 t/a in 2012 and China will become a major adipic acid producer.

Significant reduction of consumption in 2008

With the rapid development of the nylon and polyurethane sectors in China, the consumption of adipic acid has increased steadily in recent years. The apparent consumption of adipic acid in China was only 166 000 tons in 2001, but increased to 490 000 tons in 2007. The polyurethane and nylon sectors in China were affected by the global financial crisis in 2008. The apparent consumption of adipic acid was therefore reduced to 410 000 tons, a drop of around 16.4% from 2007.
   Along with the rapid development of the polyurethane shoe sole and polyurethane sizing agent market, the consumption mix of adipic acid in China has changed greatly. The consumption mix has shifted from a focus on the production of nylon 6,6 salt to a focus on the production of polyester polylol for polyurethane materials. Besides, some adipic acid is also used in the production of adipates such as dioctyl adipate and unsaturated polyester resin.
   The consumption proportion of adipic acid in China in 2008 was 58.0% for the polyurethane sector, around 20.7% for the nylon 6,6 slat sector and around 21.3% for other sectors.
   With stable development of the national economy, it is expected that the demand for adipic acid in China will still increase steadily in the next few years. The main reasons are as follows. The demand for polyester polylol as polyurethane raw material is expected to increase at an annual rate of 10%-15% in the future. The demand for adipic acid in the production of nylon 6,6 salt will also increase. Adipate plasticizers such as dioctyl adipate are important assistants for plastic processing. Such plasticizers have the features of cold resistance, oil resistance, water resistance and great endurance and their application prospect is therefore bright. The production of unsaturated polyester resin also needs small amounts of adipic acid. Besides, adipic acid can also be used to produce ammonium adipate for the electronic sector. It is expected that the demand for adipic acid in China will be around 650 000 tons in 2012. The capacity of adipic acid will reach around 900 000 t/a at that time. The output will increase remarkably and the market competition will be fiercer.
   Adipic acid producers in China only produce adipic acid or unitary downstream products today. It is therefore hard for them to get considerable profits in the fierce market competition. They should accelerate the development and production of downstream products and enhance market competitiveness so as to promote the development of the entire adipic acid sector.