China's Demand for UHMWPE Will Grow 10% Annually in the Next Three Years   

As a comprehensive performance engineering thermoplastic, ultra-high molecular weight polyethylene (UHMWPE) can replace the carbon steel, stainless steel, bronze and other materials and is widely used in large containers and pipes. It can also be used in machinery, transportation, textile, paper and other fields.

1. Global production and demand

In 2009, the global UHMWPE capacity and output were about 207 000 t/a and 160 000 tons, respectively. Ticona Corporation, Brazil's Braskem Company and Basell Company are the world's three largest UHMWPE manufacturers. Their combined capacity accounts for more than 75% of the global total UHMWPE capacity. In 2009, the world's leading UHMWPE manufacturers are listed in Table 1.
    In 2010, the global demand for UHMWPE was more than 150 000 tons, of which North America accounted for 50% and Western Europe 30%. In Asian countries, China and Japan were the key consumers of UHMWPE, consuming about 30 000 tons and 5 000 tons in 2010, respectively. In the world, about 59% of UHMWPE is used to produce sheets, profiles and pipes, about 24% is used to produce filters and fibers, and the remaining 17% is used in other areas.

2. Few UHMWPE producers in China

So far, there are 4 major UHMWPE manufactures in China, including Beijing Eastern Petrochemical Company Limited No.2 Assistant Factory (BEPC) and Ticona (Nanjing) Limited, which are the two largest UHMWPE manufacturers in China. The capacity and output of these manufactures are shown in Table 2. In 2010, China had a total UHMWPE capacity of 37 000 t/a and an output of over 25 000 tons.
    Qilu Petrochemical Company has successfully developed a low-pressure gas-phase UHMWPE production process and used this process to produce a batch of UHMWPE products, which have excellent performances. In the future, the company will increase its UHMWPE output according to the market demand. In addition, BDPC No.2 Assistant Factory has a 10 000 t/a unit which can be converted to produce UHMWPE and chlorinated polyethylene products. Its UHMWPE output is decided by the market demand.
    In 2009, China's total demand for UHMWPE was about 30 000 tons, of which 74%, about 22 000 tons, was used in the production of sheets, profiles and pipes, and 26% was used in filters, fibers, medical polymer materials and automotive materials.
    The price of UHMWPE (molecular weight 1.5 million to 4 million) in 2006 was about RMB16 800 /t. With the rising of raw materials prices, it also climbed steadily and reached RMB18 000 /t in 2007. After the global economic crisis broke out in 2008, the downstream demand for UHMWPE declined, and its price began to drop substantially from 2008 on. In 2009, its price remained at about RMB13 000 /t. In 2010, the market situation improved slightly. The price of UHMWPE rose to RMB14 000 /t, and the prices of its downstream products were also relatively high. For example, UHMWPE pipes prices were RMB28 000 to 40 000 /t, having relatively high profit margins. UHMWPE fibers prices were in general more than RMB100 000 /t, mainly used in the production of body armors and protective materials, and having even higher profit margins.

3. China's demand for UHMWPE will grow nearly 10% annually

In recent years, the self-sufficiency rate of UHMWPE in China has gradually increased, and the imports have reduced. By 2014, China's UHMWPE capacity and output are expected to reach 50 000 t/a and about 42 000 tons, respectively.
　The rapid development of China's industrial and construction industries will boost the rapid growth of the downstream product market of UHMWPE. It is expected that in 2014, China's demand for UHMWPE will reach 43 000 tons, of which the proportion that sheets and profiles account for will decline slightly, the proportion that fibers account for will increase, and the proportion that filters account for will change little. Because the demand for high-molecular medical materials and leisure and entertainment facilities increases and new uses of UHMWPE in the automotive field are being constantly explored, the demand for UHMWPE in these areas will also increase. It is expected that the average annual growth rate of the demand for UHMWPE in China in the next three years (2011 - 2014) will reach 9.9%.
　　
　　Table1 World’s UHMWPE firms
　　Company    Capacity (kt/a)
　　Ticona     90
　　Braskem    45
　　Basell    30
　　Quadrant    20
　　DSM    10
　　Beijing Eastern Petrochemical No. 2 Assistant Factory    10
　　Mitsui Chemicals    2
　　Total    207
　　Source: CCR
　　
　　Table 2 China's major UHMWPE Producers
　　Company    Capacity (kt/a)
　　Ticona (Nanjing)    20
　　Beijing Eastern Petrochemical No. 2 Assistant Factory    10
　　Shanghai Lianle Industry Science and Technology     4
　　Sinopec Qilu PetroChemical     2
　　Others    1
　　Total    37
　　Source: CCR