Dramatic Changes of China's Polyacrylamide Industry in the Past 15 Years   

By Cheng Lihong, the Research Institute of Industrial Economics of CNCIC   

Polyacrylamide (PAM) refers to a variety of acrylamide homopolymers and copolymers and is one of the most widely used water-soluble polymers. It is divided into anionic, cationic, nonionic and zwitterionic types and has various physical forms, such as liquid, gel and powder. PAM is widely used in oil exploration, water treatment, mining, paper making, textile and pharmaceuticals and is called the "additives of many industries."
   China started to use and produce PAM on a large scale 20 years ago. Unlike other countries, China mainly uses PAM as an oil displacement agent in the tertiary oil recovery in the oil exploration industry, while little is used in other areas. With the improvement of people's living conditions and the refinement of environmental protection laws and regulations, the treatment of raw water and sewage in China will be improved continuously. These trends will increase the demand for PAM in China.

1. China's PAM capacity
expands rapidly

Since 1990, China's PAM industry has entered a rapid development stage under the help of the localization of manufacturing technology, the development of the Chinese economy, the promotion of tertiary oil recovery and the strengthening of environmental protection.
   In 1995, China's PAM capacity reached 58 000 t/a, but its output was only 8 000 tons, because Daqing Petroleum Company had not yet started up its imported 50 000 t/a PAM unit. Except for the Daqing unit, other PAM units in China were all small. In 1995, the global PAM capacity reportedly reached 300 000 t/a, mainly in the United States, Western Europe and Japan.
   In 2009, China's PAM capacity was approximately 630 000 t/a, accounting for more than 50% of the world's total. And China-made PAM also can reach the world leading levels as measured by various indicators.
   The rapid development of China's PAM industry is driven by the country's fast-growing economy. The growing demand for energy and the strengthening of environmental protection will continue to promote the production and development of PAM.
   This year, China has more than 100 PAM producers, of which 5 have a capacity of more than 30 000 t/a each, including PetroChina Daqing Refining & Chemicals Company Limited, Beijing Hengju Oilfield Chemical Agent Co Ltd, SNF (China) Flocculant Co Ltd, Shandong Polymer Bio-chemicals Co Ltd and Anhui Tianrun Chemical Industrial Incorporation Company.

China's major PAM producers in 2010
Company
    Capacity, thousand t/a     Product variety
PetroChina Daqing Refining & Chemicals Company
    150     middle and high molecular anionic, for oilfields
Beijing Hengju Oilfield Chemical Agent Co Ltd
    100     anionic and cationic
SNF (China) Flocculant Co Ltd
    90      anionic and cationic
Anhui Tianrun Chemical Industrial Incorporation Company
    68      middle and high molecular anionic
Shandong Polymer Bio-chemicals Co Ltd
    40      anionic and cationic
Zhengzhou Zhengli Polymer Technology Co Ltd
    18      anionic and cationic
Anhui Jucheng Fine Chemicals Co Ltd
    15      anionic
Zhangjiakou Maier Biochemical Co Ltd
    15      anionic and nonionic
Dongying Guangzheng Chemical Co Ltd
    12      anionic, cationic, nonionic
Shanghai Hengli Water Treatment Materials Co Ltd
    11      cationic
Source: the Research Institute of Industrial Economics of CNCIC



2. China: from a net importer into a net exporter

Not until 2006 was PAM listed as a separate tariff item under 39069010 by China's General Administration of Customs. Its MFN import tariff rate is 6.5%, and its export tariff rate is zero. In 1998, China was estimated to have imported about 30 000 tons of PAM. In recent years, China's exports of PAM have exceeded its imports. In 2009, because of the global economic crisis, both imports and exports declined.

Import and Export of PAM for China
(thousand tons)
Year    Imports    Exports    Net export
2006    26.2    27.5    1.3
2007    31.3    42.5    11.2
2008    31.6    52.5    20.9
2009    21.3    32.4    11.1
1H 2010    14.7    35.6    20.9
Source: CNCIC



3. The consumption mix has changed dramatically

Because PAM is a water soluble polymer and has an active acyl group on its main chain, it is widely used in oil exploration, water treatment, pulp and paper, coal washing, beneficiation and metallurgy, chemical, textile and sugar industries. In China, the largest consumer of PAM is now the oil exploration industry and the fastest-growing demand for PAM comes from water treatment and paper-making industries.
   In 1995, the consumption mix of PAM in China was that the oil exploration industry accounted for 81% of total, water treatment sharing 9%, paper-making 5%, and mining and others 5%. In 2009, the consumption mix of PAM in China was that oil exploration consumed 51%, water treatment 30%, paper-making 15%, and mining and others 4%. This shows that the water treatment and paper-making industries occupy an increasingly large share of China's total PAM consumption.

3.1 Oil exploration

The oil exploration industry is the largest consumer of PAM and accounts for 51% of China's total PAM consumption. As an oilfield chemical, PAM is mainly used in drilling mud materials to enhance oil recovery. In the field of oil exploration, PAM has now been applied in oil drilling, acidification, fracturing, water shutoff, cementing, secondary oil recovery and tertiary oil recovery. As the Daqing, Shengli, Liaohe, Huabei and Dagang oilfields in China have entered the late production phase, only the tertiary oil recovery technology can enhance their oil yields. In addition to being used as an oil displacement agent, PAM also has other uses in oilfields, so the demand for PAM in the oil exploration industry will remain to grow at a relatively high rate.

3.2 Water treatment

In China, water resources are relatively scarce. In terms of the per capita water resources, China is extremely short of water. On the other hand, the existing water resources have been seriously polluted. Water conservation and sewage treatment have become urgent problems in the country. In the field of water treatment, PAM is mainly used in the treatment of raw water, urban sewage and industrial wastewater.
   The Chinese government attaches great importance on the conservation of water resources. Especially in recent years, it has built a large number of urban wastewater treatment plants. In 2008, there were a total of 1 692 urban sewage treatment plants in China, increasing by 434 compared to the previous year, and the treatment rate of urban sewage reached 57.4%, up 8.3 perce