China’s High-end Maleic Anhydride Derivatives in Short Supply

By Sun Zhansong and Bai Haidan, CNCIC

Maleic anhydride (MA) derivatives, which mainly include THPA, HHPA, MTHPA, MHHPA and nadic anhydride, are mostly used as epoxy curing agents and unsaturated polyester resins.
   The majority of technical patents are owned by Italy's Polynt Group, and New Japan Chemical Co., Ltd. China has produced THPA and MTHPA since 1980s and, in the 21st century, has conducted R&D on HHPA and MHHPA, both of which were first manufactured by Puyang Huicheng Chemicals Co., Ltd (Puyang Huicheng) in 2003. At present, China’s technologies regarding THPA and MTHPA have reached a certain level, but it is still hard for domestic MHHPA to compete with foreign products in quality. In recent years, due to more sever competition in the maleic anhydride derivatives market, some enterprises have greatly developed high-margin products like HHPA and nadic anhydride. The pioneering Puyang Huicheng has mastered advanced techniques for many maleic anhydride derivatives such as 5-norbornene-2, 3-dimethyl anhydride, MHHPA and liquid THPA, achieving good economic benefits.

1. China’s high-end MA derivatives in short supply

Most maleic anhydride derivatives are used as epoxy curing agents and unsaturated polyester resins to be applied in areas like LED encapsulation, dry-type transformers, switches, mutual inductors, insulators, electric reactors, electronic components, glass fiber reinforced products and sporting equipment; a small quantity is used to produce polyester resins and alkyds. In 2011, China consumed around 100 000 tons of maleic anhydride derivatives – 75 000 tons in epoxy curing agents, 15 000 tons in unsaturated polyester resins, and the remainder in alkyds.
   China’s output of high-end maleic anhydride derivatives is far lower than the market demand, and the gap is filled by imports from Italy and Japan. With increasing domestic electronic production activities, China’s demand for maleic anhydride derivatives has been growing, especially demand for high-end products of MHHPA, HHPA and acidic anhydride as consumers from home and abroad have stricter quality requirements. With an annual increasing rate of 15.8% from 2011 to 2015, domestic demand on maleic anhydride derivatives is expected to reach 180 000 tons in 2015.

2. Manufacturers mainly distributed in East and South-central regions

Epoxy curing agents and unsaturated polyester resins, made from maleic anhydride derivatives, are mainly produced and consumed in East China and coastal areas, where both manufacturers and consumers of maleic anhydride derivatives are concentrated.
China boasted 100 000 t/a maleic anhydride derivative capacity in 2011 – East China, 46 000 t/a, 46%; South-Central China, 39 000 t/a, 39%; the remaining areas, 15 000 t/a, 15%.
   Polynt Chemical (Changzhou) Co., Ltd (PCC) and Jiaxing Dongfang Chemical Corporation (JDC) are two major manufacturers in East China. With 12 000 t/a maleic anhydride derivative capacity and 7 500 t/a output, PCC is mainly engaged in producing THPA, HHPA, MTHPA and MHHPA. JDC has the MA derivatives capacity of 12 000 t/a, output of 9 800 t/a, key products are MTHPA and MHHPA.
   In South-Central China, the main producer is Puyang Huicheng, which boasted 8 000 t/a capacity in 2010, increasing to 15 000 t/a in 2011 upon completion of a new factory, making it China’s largest maleic anhydride derivative supplier.

3. Development barriers

Though China enjoys a stable supply and demand for all THPA, MTHPA and MHHPA, maleic anhydride derivatives with maleic anhydride and alkadiene (C4, C5 fraction) as major raw materials, have to overcome development barriers of new technology R&D, technical applications and financial support.
   China’s maleic anhydride derivative market is connected with the world’s. Technology, international markets, capital and management are vital to the domestic PA industry.