PVA: New Development Mode Required   

Summary of global PVA market

PVA (polyvinyl alcohol) is the raw material to make other polymers like polyvinyl nitrate (PVN) and polyvinyl acetals. The global capacity in 2009 was 1.476 million tons, mainly in China, Japan and the United States. Larger producers include Kuraray (Japan and Europe) and Sekisui Specialty Chemicals (USA) but mainland China has installed a number of very large production facilities in the past decade and currently hosts approximately 45.6% of the world's capacity, 673 kt/a in 2010, while Japan and United States had 283 kt/a and 195 kt/a. The main producers in China include Sinopec, ChemChina, Anhui Wanwei Group Co Ltd and Shanxi Sanwei Group Co Ltd.
    Globally, 1.02 million tons of PVA was consumed in 2009, 68.7% of which was in Asia-Pacific. North America and Western Europe consumed 13.1% and 13.7%. PVA's major use is vinylon fiber production, paper adhesive and textile sizing agent.

China's new PVA project: strong competitive power

With over forty years of development, China has become the largest PVA producer in the world and is able to produce PVA from various raw materials including oil-cracked ethylene, acetylene from natural gas and acetylene from calcium carbide. Table 1 lists China's major PVA producers.
    Currently, there are numerous PVA projects planned or under construction in China. Most of them will have an initial capacity between 50 000 t/a and 100 000 t/a and are located close to sources of energy and raw materials, aiming to form a comprehensive coal-chemical industry chain. Therefore, it is believed that the new plants will make China's PVA industry more competitive, and industry experts predict that China's PVA capacity will exceed 1.2 million tons in 2015. Table 2 shows the detail of China's new PVA projects.

Sustainable growth in consumption

The period of 2000 to 2007 was believed to be "a good time" for China's PVA industry, with 7.2% AAGR (average annual growth rate) in domestic consumption, wich achieving the highest output in 2007, approximately 500 kt. However, China's PVA downstream market suffered a severe setback during the global financial crisis that emerging in 2008 which caused a 4.5% decrease in domestic consumption compared with the previous year. In 2009, China PVA consumption increased 2.7% due to the recovery of the downstream market in the second half of the year. Figures 1 and 2 show the profile of China PVA consumption.
    China PVA consumption is expected to rise steadily in the next few years by the stimulation of demand growth, fluctuating around 4% in the period of 2009 to 2015. Consumption is predicted to reach 611kt in 2015.
    Textile sizing agent: due to environmental considerations, use of PVA as textile sizing agent has been curtailed in many countries. Therefore, the proportion of PVA in China's textile industry dropped to 21% in 2010 from 35% in historic highs and the decline will continue in the next few years - experts predict 17% in 2015.
    PVA fiber: in 2010, China's PVA fiber capacity reached 68.7 kt/a, and some factories in China are already capable of producing high strength and high modulus fibers that are mainly exported. In addition, PVA fiber can be used to improve concrete's crack resistance and it is attracting increasing interest throughout the nation.
    PVB resin: Fifteen thousand tons of PVB (polyvinyl butyral) resin was produced by Chinese factories in 2009 under the annual capacity of 25 000 tons. PVA is a raw material for PVB. Currently, some solar PV (photovoltaic) cell producers abroad use PVB film in solar cell encapsulation glass, replacing conventional EVA film because PVB film has good aging-resistance. With the popularization of solar cells, it is believed that the future for PVB film in China will be quite good.
    PVA film: water-soluble PVA films have the advantages of solubility and environmental friendliness. They have become one of the most successful green environmental protection materials throughout the world in recent years.

Future: overcapacity and need for a new development mode

Large-scale capacity expansion of China's PVA industry will wind down in the next few years, and analysts say China's PVA capacity will exceed 1.2 million t/a in 2015. However, domestic PVA demand will grow at a constant rate and the prediction of demand in 2015 is 73 000 tons, dramatically lower than capacity, so China will be suffering from overcapacity. Alternatively, China's PVA producers may have to change plans and adopt a new development mode for the industry.

Table 1  China's PVA companies and capacity in 2010
Company    Capacity (kt/a)    Raw Materials    Downstream Product
Sinopec Shanghai Petrochemical     43    oil-cracked ethylene    
Sinopec Sichuan Vinylon Works    165    acetylene from natural gas    PVA fiber
Beijing Dongfang Petrochemical     27    oil-cracked ethylene    
Hunan Xiangwei Co Ltd    90    acetylene from calcium carbide     PVA fiber, PVB resin
Guizhou Crystal Organic Chemical    30    acetylene from calcium carbide     
Anhui Wanwei Updated High-Tech Material Industry    100    acetylene from calcium carbide    PVA fiber
Guangxi Guangwei Chemical Industry    30    acetylene from calcium carbide     
Fujian Textile and Chemical Fiber Group    60    acetylene from calcium carbide     PVA fiber
Shanxi Sanwei Group    100    acetylene from calcium carbide     
Jiangxi Chemical Fibre and Chemical Engineering    40    acetylene from calcium carbide     
Yunnan Yunwei Group    28    acetylene from calcium carbide     
Lanzhou New West Vinylon     30    acetylene from calcium carbide     PVA fiber
Shijiazhuang Chemical Fibre    20    acetylene from calcium carbide     
Changchun Chemical (Jiangsu) Co Ltd    40    oil-cracked ethylene    
Inner Mongolia Mengwei Technology Co Ltd    50        
Total    823        
Source: CCR

Table 2  China's new PVA project
Company    Capacity (kt/a)     Project Schedule
Inner Mongolia Mengwei Technology Co Ltd    100    50 kt/a, phase one, operated at the end of 2010
Guangxi Guangwei Chemical Industry    50    uncertain
Inner Mongolia Shuangxin Chemical Industry    110    55 kt/a, phase one, operating in 2011
Ningxia Dadi Metallurgical Chemical     100    55 kt/a, phase one, operating in 2011
Guodian Younglight Energy Chemical Group