Chinese Hydrogen Peroxide Market Steps into Changing Times   

By Li Zejiang, the Research Institute of Industrial Economics of CNCIC
As a strong oxidizer, hydrogen peroxide is highly environmentally friendly and is regarded as a safe, effective, powerful and versatile oxidant, which is commonly used as disinfectant, antiseptic, oxidizer, and in rocketry as a propellant. China's hydrogen peroxide market has a tendency to be more attractive and important in recent years, known for fast growing capacity, exploring consumption scope and alluring prospects. Throughout this article, the data of capacity, output and consumption refer to 100% hydrogen peroxide but the import and export gave the actual number, commonly on the basis of 27.5% hydrogen peroxide solution.

Growing capacity
China's capacity to produce hydrogen peroxide has exceeded that of the USA since 2004 and China has become a leading source worldwide, while the pace of growth is still sustained at an acceptable level. The capacity and output reached 1.41 million t/a and 1.13 million tons respectively in 2009, both tops globally. Currently, China has more than 60 hydrogen peroxide manufacturers with more than 70 lines. Of those, Guangdong Zhongcheng Chemicals Inc., Ltd, Shandong Huatai Paper Company Limited, and Jiangshan Hydrogen Peroxide Co., Ltd. held 222 000 t/a, 116 300 t/a and 115 500 t/a as top three in 2009, and five other companies each have an annual capacity over 50 000 tons.
   Data from an official report show that China's hydrogen peroxide import in recent years remained relatively steady at 23 600 tons in 2008, 25 600 tons in 2009 and 25 092 tons in the first eleven months of 2010. Typically, around 33% of imported hydrogen peroxide is used in electronic grade applications, with other imports used for textile bleaching and chemical reagent purposes. Unlike import, China's hydrogen peroxide export seems more complex and unpredictable, moving 25 411 tons in 2008 and 29 502 tons in 2009 and dropping down to 13 213 tons in the first eleven months of 2010. However, it was believed that opportunities are still open in spite of the import-export imbalance.

Consumption scopes expanding
In 2009, China's consumption of hydrogen peroxide reached to 1.125 million tons. Consumption has a remarkable growth rate of 19.9% annualized since that 264 000 tons in 2001 and 857 000 tons in 2007, which obviously reveals that the consumption of hydrogen peroxide has moved into high gear. The main reason for this the rapid development of the three main consuming industries - papermaking, textiles and chemical synthesis - which are in great need of hydrogen peroxide, not only in traditional production, but also for innovation of new products. Moreover, consumption scopes such as electronics, aquaculture and food industries, trying to use hydrogen peroxide as replacement of non-environmental friendly materials, are the other impetus to stimulate the consumption. The following summarizes the application of hydrogen peroxide in China.
   1. Industrial grade hydrogen peroxide
Industrial grade hydrogen peroxide, in concentration of 27.5%, 30%, 35% or 50%, is mainly used in papermaking, textiles and chemical synthesis. Papermaking used 423 000 tons of hydrogen peroxide in newsprint production, which had 6 million t/a of capacity in 2009, 15% more than in previous year. Also large papermaking factories attempt to buy more domestic wasted paper pulp to decrease production cost, in other words, needing more hydrogen peroxide for bleaching.
   In terms of import policies of developed countries, the textile products are required to be bleached by hydrogen peroxide; hence the consumption of hydrogen peroxide could be guaranteed in China as the most important textile exporter. According to official statistics, in 2009 China's total output of fabric dyeing cloth approached to 53. 98 billion meters, thus consumed 313 000 tons hydrogen peroxide as bleach.
   Other industries with increasing demand for hydrogen peroxide are fine chemicals production, water management, building materials, machinery and electroplating.
    2. Electronic grade hydrogen peroxide
As mainly applied in silicon slice washing and photoresist stripping, highly pure hydrogen peroxide performs as a substantial chemical in the electronics industry, which has strict quality specifications for liquid chemicals. In 2009, approximately 48 000 tons of hydrogen peroxide was used in the electronics industry.
    3. Food grade hydrogen peroxide
Hydrogen peroxide 30%, 35% and 50% is invaluable in the food industry as disinfectant and bactericide, and about 19 000 tons of hydrogen peroxide was consumed in 2009. Typically in drinking water disinfection, hydrogen peroxide has broad market prospect, regarded as a proper substitute for chlorine. Meanwhile, hydrogen peroxide is seeing expanding application in high tech industries like vegetable-fruit freshness.
    4. Pharmaceutical grade hydrogen peroxide and other applications
The pharmacy grade hydrogen peroxide concentrations are 35%, 50% and 70%, as bulk drug in medicine production and 95% is used as fuel in the aerospace industry.

Industrial Integration
Above all, both production and consumption of hydrogen peroxide in China have moved into a favorable situation, which has increasing capacity and expanding consumption scope. However, it is estimated that extreme fluctuation will come after excessive development of the hydrogen peroxide market, which may happen in the next two years, resulting in the exit of small factories. The whole market will be rather fragmented, and big investors may have ambitions to integrate the market, hence to form industry giants which have a complete product chain and occupy large market share. These would probably appear in north, south and east China.
    For the reason above, it could be forecast that hydrogen peroxide output in China would still increase but at a comparatively slow growth rate, while the market tends toward more integration after the next couple of years.