China Should Actively Develop Specialty PVC Paste Resin   

By Liu Lingmei  Shanghai Chlor-Alkali Chemical Co., Ltd.

Production

In 2010, China's total production capacity of PVC paste resin reached about 690 000 t/a, up 14.3% year on year thanks to the startup of new PVC paste resin projects. In December 2010, Tianjin Chemical Plant's 60 000 t/a new PVC paste resin unit was put into production; and in October 2010, West Chlor-Alkali Chemical Co Ltd's 40 000 t/a PVC paste resin unit came on line. Due to technical and utility facility factors, China's PVC paste resin output is much smaller than its capacity. It was about 460 000 tons in 2010. For example, due to the shortage of municipal steam supply in winter, the PVC paste resin unit in Shenyang Research Institute of Chemical Industry (SYRICI) cannot run at full capacity; and because of technical bottleneck, although Chenzhou Chemical Co Ltd has a PVC paste resin capacity of 100 000 t/a, its actual output was only 70 000 tons in 2010. China's PVC paste resin producers are listed in Table 1.
                                                            
Table 1 China's producers of PVC paste resin     (thousand t/a)
Producer    Capacity    Remarks
Tianjin Chemical Plant    170    put into run Dec 2010
Chenzhou Chemical Co Ltd    100    Actual annual output 70 000 tons
Shenyang Research Institute of Chemical Industry    130    Afflicted with steam shortage
West Chlor-Alkali Chemical Co Ltd    40    Put into production in October 2010
Shanghai Chlor-Alkali Chemical Co Ltd    100    Running at full capacity
Xi'An Thermal Power Co Ltd    12    Not running at full capacity
CNSC Anhui Hong Sifang Co Ltd    60    Not running at full capacity
Dongbei Gaoxin Chemical Co Ltd    10    Low operating rate
Wuhan Xianglong Electric Industry Co Ltd    30    Annual output 15 000 tons
Lanzhou Chemical Co Ltd    5    Low operating rate
Yichang Shanshui Investment Co Ltd    30    Not running at full capacity
Total    687

   In the next few years, there will be at least 10 new PVC paste resin projects to be built in China, with a total new capacity of more than 200 000 t/a. For example, SYRICI is now negotiating with certain domestic companies about the transfer of the PVC paste resin production equipment and technology; a company plans to build a 100 000 t/a PVC paste resin project in Jining, Shandong province; Yibin Tianyuan Chemical Co Ltd prepares to construct a 40 000 t/a PVC paste resin in Yibin, Sichuan province; and Qinghai Yanhe Chemical Group plans to build a 20 000 t/a PVC paste resin project with the Arkema technology.

Consumption

In 2010, China imported 98 000 tons of PVC paste resin and exported 6 000 tons, and its apparent consumption of PVC paste resin is estimated to reach about 550 000 tons (see Table 2).
                                      
Table 2  Production and consumption of PVC paste resin in China  (thousand tons)
Year    2005    2006    2007    2008    2009    2010(estimated)
Output    269    308    388    360    446    460
Imports    150    100    70    63    86    98
Exports    49    32    23    8    3    6
Apparent consumption    370    376    435    415    529    552

   In China, PVC paste resin is mainly used for the manufacture of artificial leather, floor covering, wallpaper, flooring sheet, car interior decorating materials, inks, adhesives, etc. It features a simple processing technology, short process flow and small investment, so its processing is suitable for small enterprises and has developed rapidly in China in recent years. In China, the processing capacity of PVC paste resin is mainly distributed in the country's eastern and southern regions. The two regions account for more than 65% of the country's total PVC paste resin consumption. For example, production bases of man-made leather from PVC paste resin have been formed in Wenzhou and Yiwu in Zhejiang province; producers of toys from PVC paste resin are mainly located in Guangdong and Zhejiang provinces; and Jiangsu province occupies a large market share in the production of wallpaper and hoses based on PVC paste resin.

China should actively develop specialty PVC paste resin

In 2008, despite low prices and production for domestic PVC paste resin influenced by the world financial crisis, China still imported 63 000 tons of PVC paste resin. The domestic demand for high-grade PVC paste resin was about 100 000 tons a year.
   Overall, China's PVC paste resin industry has the following disadvantages: 1) its integrated production technological level, production and consumption levels and product quality stability is low; 2) its product portfolio is relatively monotonous and generic. Some high-grade PVC paste resin varieties need to import from abroad; 3) its application is narrow, which restricts the production of PVC paste resin; 4) the production of related modifiers has not attracted enough attention. With the steady growth of China's economy and wide applications of PVC paste resin, the domestic demand for high end PVC paste resin is expected to grow, especially in the automotive, construction, electronics and coatings areas. However, general PVC paste resin production will face fierce market competition in the country. As a result, international chemical player will enter China's specialty PVC paste resin market.