China's Engineering Plastic Market to See Double-Digit Growth during 2011-2015   

By Yang Weicai, China Petroleum and Chemical Industry Federation
China's consumption of engineering plastics grew at an average annual rate of over 20% during 2006-2007. Due to the global financial crisis, its growth pace slowed down during 2008-2009 but still remained at around 7%-8%. Because the engineering plastic sector features high technical content, high added value and high-risk-resistance ability, it could keep a relatively high growth rate even during the global financial crisis. With the further recovery of the global economy and domestic market, in 2010 China's demand for engineering plastics continued to increase, and its consumption of engineering plastics is expected to reach 2.35 million tons, up 7.7% year on year. It is expected that the total demand for engineering plastics in China will reach 3.8 million tons in 2015 and its average annual growth rate will be around 11% in the next five years.

Engineering plastic alloys develop fast, but raw materials fall short

At present, China's engineering plastic industry features the rapid development of engineering plastic alloys, fierce market competition and the supply shortage of raw materials. In recent years, China's resin alloys and modified plastics have seen rapid development, and the technology and quality levels of some products have been close to international advanced levels. Major resin alloy and modified plastic producers in China are Guangdong Kingfa Science & Technology Co., Ltd., Shandong Dawn Group and Shanghai KumhoSunny Plastics Co., Ltd.
  The scale of domestic engineering plastic enterprises was expanded constantly over the past five years, and a batch of large-scale enterprise groups with independent intellectual property rights and product features, such as China National Bluestar (Group) Corporation, Yuntianhua Group Co., Ltd., China Shenma Group Co., Ltd. and Sichuan Deyang Science & Technology Co., Ltd., were formed. Sinopec and PetroChina are actively expanding their market shares in the domestic engineering plastics market, and many multinational companies, such as Bayer, Teijin, Mitsubishi, PolyPlastics, Asahi Kasei Corp, DuPont, DSM, Ticona, Saudi Basic Industries Corporation (SABIC) and INVISTA, have also entered the Chinese engineering plastic market. Thus, China's engineering plastic market will face fierce competition.
  However, compared to the international advanced level, China's resin products still lag far behind in quality, variety and applications. Due to low quality and market barriers, China's resin products are mainly used in the mid- and low-end fields such as household appliances and can hardly enter high-end fields such as automobiles and electronics.

1. Polyamide (PA)

China's demand for PA is estimated to be over 400 000 tons in 2010 and will reach over 800 000 tons in 2015. In China, PA6 is mainly used in the manufacturing of cord fabrics. Owing to its short supply, the price of PA6 in China has grown constantly. In the engineering plastic modification sector, there are more than 35 enterprises with a capacity of over 10 000 t/a each, so the market competition is very fierce. In China, the demand for PA66 is quite large, but the supply of PA66 is short due to the small production scale. China Shenma Group Co., Ltd. is the only large-scale PA66 producer in China. In recent years, the company has merged two PA66 producers, one in Jiangsu Province and the other in Fujian Province, so its total PA66 capacity has reached around 160 000 t/a. Long-chain PA1212 is in the stage of industrialization. Its industrialization project jointly done by Shandong Hilead Biotechnology Co., Ltd. and Zhengzhou University is under construction. The products jointly developed by the two units also include high-temperature-resistance semi-aromatic nylon, which will be able to replace imported products such as PA11 and PA9T. In February 2011, INVISTA announced its plan to construct a plant for the production of adiponitrile, hexamethylene diamine (HMD) and PA66 in Shanghai. The plant will start to be constructed in 2012 and be put into operation in 2014. (CCR2011 No. 5)
  In the aspect of raw materials, the production scale of caprolactam (CPL) in China is small, so the production of CPL in China needs to be expanded. In China, adiponitrile for the production of nylon 66 almost totally depends on imports. China Shenma Group Co., Ltd. has cooperated with scientific research institutions to conduct medium-scale pilot tests on adiponitrile production using the butadiene process. And the industrialization of this process will be realized during 2011-2015.

2. Polycarbonate (PC)

The demand for PC in China is estimated to be around 1.08 million tons in 2010 and will reach more than 1.8 million tons in 2015. PC in China is manly used in optical devices, photomemory materials and construction materials.
  In China, Gansu Yinguang Chemical Industry Group Co. Ltd. is the only China-funded PC producer, having a capacity of 5 000 t/a. The combined PC capacity of Bayer MaterialScience (Shanghai) Co., Ltd. and Teijin's plant in Zhejiang Province reaches 330 000 t/a, occupying most of the Chinese market. During the Twelfth Five-Year Program period (2011-2015), the total capacity of PC projects that are under construction or planned to be constructed in China will reach around 800 000 t/a, including the 200 000 t/a PC expansion project of Bayer MaterialScience (Shanghai), the 65 000 t/a PC expansion project of Teijin in Zhejiang Province, the 60 000 t/a PC project jointly invested by Sinopec Beijing Yanhua Petrochemical Company and Mitsubishi Chemical Corporation, the 80 000 t/a PC project of Mitsubishi Gas Chemical Company in Shanghai, and the 260 000 t/a PC project jointly invested by Sinopec and SABIC in Tianjin. In addition, PetroChina Jilin Petrochemical Co., Ltd. also plans to build a PC plant.
  Yantai Wanhua Polyurethanes Co., Ltd. (Wanhua) and Gansu Yinguang Chemical Industry Group Co., Ltd. have separately carried out medium-scale pilot test to synthesize PC with the phosgene process on the basis of phosgene-process-based diphenylmethane diisocyanate (MDI) and toluene diisocyanate (TDI) production technologies. Based on the pilot tests, Wanhua plans to build a new 50 000 t/a PC production line during 2011-2015.

3. Polyoxymethylene (POM)

China's POM capacity was around 500 000 t/a in 2010, significantly increasing compared to 2009. Its POM output can now basically meet the domestic demand. Therefore, prudence should be taken toward the construction of new POM projects during 2011-2015. Yuntianhua Group Co., Ltd., Shanghai Bluestar New Chemical Materials Co., Ltd. and Inner Mongolia Tianye Chemical Industry Group Co., Ltd. are major POM suppliers in China. These companies mainly use technologies imported from Poland's ZAT and Hong Kong's BDI and lag behind multinational companies, such as PolyPlastics, DuPont and Asahi Kasei, in terms of product quality and variety.
  Out of China's POM consumption, the automobile industry accounts for 15%, and electronics / electric and daily use industries 78%. Compared to other countries, the application of POM in the automotive sector in China is relatively small. Due to the low quality of domestic products and certification barriers, POM products used in the automotive sector in China are mainly high-end products imported from abroad. In order to expand the application of POM in auto parts, China's POM producers should strengthen research on the modification of POM and pay more attention to product certification and standard system construction.

4. Polybutylene terephthalate (PBT)

The development of electronic/electric and automobile industries has boosted the demand for PBT. China's de