Market Analysis and Development Forecast for BPA in China     

In the past two years, China's annual apparent consumption of bisphenol A (BPA) was basically stable, about 500 000 tons. Considering the impact of the international financial crisis, it is expected that in 2012, China's demand for BPA will be 600 000 - 650 000 tons, and China's BPA capacity will reach 760 000 t/a. So in the next 2-3 years, the demand and supply of BPA in China can be basically balanced, and its market prospects will depend primarily on the development of the downstream polycarbonate industry.
   BPA can be used to produce a variety of polymer materials, such as epoxy resin (ER) and polycarbonate (PC). It can also be used to produce PVC heat stabilizers, rubber antioxidants, paint and ink antioxidants, plasticizers and so on. A variety of polymer materials and agents made from BPA have been widely used in the chemical industry, light industry, mechanical and electrical, transportation, construction, aviation and aerospace industries.

1. The Current Production Situation of BPA in China   

For a long time, China's demand for BPA has been dependent on imports. In 2005, only two plants produced BPA - Wuxi Resin Factory of BlueStar New Chemical Materials Co., Ltd. and Tianjin Shuangfu Fine Chemicals Co., Ltd. - with a combined capacity of only 57 000 t/a. In 2004, 80% of the BPA consumed in China was imported. After China took anti-dumping measures concerning BPA, the price of BPA shot up almost 80% to RMB20 000 per ton. This has stimulated Chinese enterprises to build BPA production units.
    The 100 000 t/a BPA unit of Bayer Polymers (Shanghai) Co., Ltd., located in Caojing, Shanghai, was put into production in late 2007. It was jointly built by German Bayer Corporation and Sinopec Shanghai Petrochemical Co., Ltd. and has the largest single-set capacity of BPA in China. Its product is supplied to its own matching 100 000 t/a polycarbonate unit.
    Kingboard Chemical Holdings Limited which headquartered in Hong Kong has built a new 25 000 t/a BPA unit in the Daya Bay, Huizhou in Guangdong province. This unit was put into operation in January 2008. Parts of its products are supplied to its own epoxy resin plant.
    BlueStar New Chemical Materials built a 90 000 t/a BPA unit in Nantong of Jiangsu province and plans to put it into operation in 2010. Shanghai Sinopec Mitsui Chemical Co., Ltd., a 50/50 joint venture between Mitsui Chemicals, INC. and Sinopec Corp., set up a 120 000 t/a BPA unit in Shanghai in September 2008 and has now successfully put it into trial production.
   By the end of August 2009, Mitsubishi Chemical Corporation and Sinopec Beijing Yanshan Petrochemical Company set up a joint venture Sinopec Mitsubishi Chemical Polycarbonate (Beijing) Co., Ltd. This joint venture will build a 100 000 t/a BPA unit in Beijing and put it into operation in 2010. As of the end of 2009, China's BPA capacity reached 302 000 t/a. But the 16 000 t/a BPA unit of Tianjin Shuangfu Fine Chemicals Co., Ltd. often stops production due to the technical obstacles of equipment and processes.
   In addition, Bayer plans to expand the capacity of its 100 000 t/a BPA unit in Caojing, Shanghai to 200 000 t/a. In November 2009, Sinopec Corp. and Saudi Basic Industries Corporation jointly established SINOPEC SABIC Tianjin Petrochemical Co., Ltd., preparing to build a 100 000 t/a BPA unit and other projects. PetroChina Fushun Petrochemical Co., Ltd. also plans to build a 200 000 t/a BPA project.
   Other BPA projects that are being planned include Shandong Haihua Group's 100 000 t/a BPA unit and Sinopec Maoming Petrochemical Co., Ltd.'s 100 000 t/a BPA unit. If these projects are completed, in 2010 - 2015 China's BPA capacity will be further increased by 500 000 t/a. It is expected that China's BPA capacity will reach about 760 000 t/a by 2012 and about 860 000 t/a by 2015. The two 16 000 t/a BPA units are expected to close in two years.

  
China's major producers of BPA In 2009     

Company     Capacity (000 t/a)    Location    Technology    
Shanghai Sinopec Mitsui Chemical Co., Ltd.
             120      Shanghai    Developed by Mitsui Chemical
Bayer Polymers (Shanghai) Co., Ltd.
             100      Shanghai    Ion exchange process
Wuxi Resin Plant of BlueStar New Chemical Materials Co., Ltd.    
             16       Wuxi        Ion-exchange process imported from Portland
              25      Wuxi        Chiyoda CT-BISA Process
Kingboard Chemical Holdings Limited
             25      Huizhou, Guangdong      Ion exchange method
Tianjin Shuangfu Fine Chemical Co., Ltd.  
            16      Tianjin       Developed by Tianjin University and Sinopec Corp.
Total        302
Source: CNCIC    


2. Analysis and Forecast of China's BPA Market    

(1) The supply and demand situation of BPA in China   

In China, BPA is mainly used to produce epoxy resin. The production and consumption of epoxy resin in China have maintained rapid growth for many years, so China has become the world's largest epoxy resin producer and consumer. In the early 2000s, 90% of all the BPA consumed in China was used by the epoxy resin industry. In the next few years, China's epoxy resin industry will slow down its pace of development slightly, but its demand for BPA will still grow 5% -7% a year.
   In China, although the BPA capacity has now increased significantly, the supply is still far from meeting the strong demand from polycarbonate and epoxy resin industries, so the import of BPA increases year by year. This is because a considerable number of enterprises produce BPA for their own use. For example, Bayer Polymer (Shanghai) Co. Ltd. and Kingboard Chemical Holdings Limited produce BPA for their own uses, and part of the BPA produced by BlueStar New Chemical Materials' Nantong plant is supplied to its own downstream epoxy resin project.
   In 2007, China's BPA output was about 47 000 tons, and more than 90% of its apparent BPA consumption that year had to be imported. In 2007- 2009, China's BPA output increased a lot, but most of it was for the producers' own use, so the amount of BPA entering the open market was small. It is expected that in 2010, as Shanghai Sinopec-Mitsui Company's 120 000 t/a BPA unit and BlueStar's 90 000 t/a BPA unit in Nantong are put into full operation, the supply of BPA will increase significantly and its import will be reduced accordingly in China.
   But as the new capacity is subsequently put into production, it is expected that after 2012, China's 760 000 t/a BPA capacity will cause its BPA market to be saturated gradually. However, it is worth noting that due to t