Overcapacity Stresses China’s Vinyl Acetate Industry

By Cui Xiaoming

China’s vinyl acetate capacity reached 1.58 million tons in 2009, increasing to 2.30 million tons in the first seven months of 2012. More than 10 enterprises such as Shanxi Sanwei Group Co., Ltd and Anhui Wanwei Updated High-Tech Material Industry Co., Ltd employ the calcium carbide acetylene process, boasting a capacity of 1.21 million tons, 52.32% of the total; Sinopec Sichuan Vinylon Works, natural gas acetylene process, 500 000 tons, 21.71%; Sinopec Shanghai Petrochemical Co., Ltd & Sinopec Beijing Eastern Petrochemical Co., Ltd & Celanese (Nanjing) Chemical Co., Ltd, oil ethylene process, 598 000 tons, 25.97%.

Table 1    China’s Major Vinyl Acetate Producers by the End of July 2012 (kt/a)
Company    Capacity    Production Process
Celanese (Nanjing) Chemical Co., Ltd    300    oil ethylene process
Sinopec Sichuan Vinylon Works    500    natural gas acetylene process
Sinopec Shanghai Petrochemical Co., Ltd    118    oil ethylene process
Sinopec Beijing Eastern Petrochemical Co., Ltd    180    oil ethylene process
Shanxi Sanwei Group Co., Ltd    135    calcium carbide acetylene process
Anhui Wanwei Updated High-Tech Material Industry Co., Ltd    155    calcium carbide acetylene process
Hunan Xiangwei Co., Ltd    100    calcium carbide acetylene process
Guangxi Vinylon Group Limited Company    70    calcium carbide acetylene process
Jiangxi Jiangwei High Technology Co., Ltd    100    calcium carbide acetylene process
Fujian Textile Fiber Group Co., Ltd    60    calcium carbide acetylene process
Guizhou Crystal Organic Chemical (Group) Co., Ltd    55    calcium carbide acetylene process
Lanzhou Vinylon Co., Ltd    60    calcium carbide acetylene process
Shijiazhuang Chemical Fibre Co., Ltd    25    calcium carbide acetylene process
Yunnan Yunwei Co., Ltd    85    calcium carbide acetylene process
Mudanjiang Dongbei Chemical Co., Ltd    30    calcium carbide acetylene process
Sichuan Yibin Tianyuan Group Co., Ltd    120    calcium carbide acetylene process
Shandong Tengzhou Zhongsheng Chemical Co., Ltd    100    calcium carbide acetylene process
Inner Mongolia Mengwei Technology Co., Ltd    110    calcium carbide acetylene process
Total    2 303    　

　China produced 957 000 tons of vinyl acetate in 2004, increasing to 1.21 million tons in 2008 (up 11.73% YOY) and to 1.73 million tons in 2011 (up 25.36% YOY). From 2006 to 2011, the output grew 10.46% annually.

1. Consumption Rises Steadily
Benefiting from the success of industries making textiles, paper and materials for construction and home decoration, domestic demand for coatings and paint has been growing rapidly, propelling vinyl acetate consumption. With an annual growth rate of 9.14% from 2006 to 2011, China’s apparent consumption of vinyl acetate reached 1.45 million tons in 2008 (gaining 6.77% YOY), increasing to 1.96 million tons in 2011 (up 21.14% YOY).

Table 2    Supply and Demand of China’s Vinyl Acetate in Recent Years (kt)

Year    Output    Import    Export    Apparent Consumption    Self-sufficiency Rate/%
　2004    957    147.2    2.9    1 101.3    86.9
　2005    1 027    152.5    1.3    1 178.2    87.2
　2006    1 052    214.9    0.3    1 266.6    83.1
　2007    1 083    278.9    1    1 360.9    79.6
　2008    1 210    255.1    12.1    1 453.0    83.3
　2009    1 250    256.1    0.2    1 505.9    83
　2010    1 380    257.7    18.2    1 619.5    85.2
2011    1 730      252.4    20.5    1 961.9    88.2
2012 (1-6)    -    139.6    4.6    　    -           -

　 At present, around 68.9% of vinyl acetate is used in producing polyvinyl alcohol; 16.2%, polyvinyl acetate; 6.1%, ethylene-vinyl acetate copolymer; 8.8%, other applications.
　China’s vinyl acetate was mainly applied to polyvinyl alcohol production in 1990s, but in recent years more and more products are used in the fields of polyvinyl acetate copolymer and emulsion. While domestic polyvinyl alcohol enterprises will continue to expand capacity, companies making polyvinyl acetate, VAE copolymer emulsion or EVA will also promote vinyl acetate consumption, which is estimated to reach around 2.5 million tons in 2016, when the capacity will exceed 4.5 million tons, leading to more severe competition.

2. Newly Increased Capacities
In recent years, many enterprises have expanded their capacity through constructing new units or expanding old ones. Details regarding new capacity are as follows:
– 120 000 t/a, Sichuan Yibin Tianyuan Group Co., Ltd
– 110 000 t/a, Inner Mongolia Mengwei Technology Co., Ltd
– 440 000 t/a, Inner Mongolia Shuangxin Environment-Friendly Material Co., Ltd
– 450 000 t/a, Guodian Ningxia Yinglite Ningdong Coal-based Chemical Co., Ltd
– 100 000 t/a, Shandong Tengzhou Zhongsheng Chemical Co., Ltd
– 100 000 t/a, Guangxi Guangwei Chemical Co., Ltd
– 50 000 t/a, Yunnan Yunwei Co., Ltd
– 300 000 t/a, Yankuang Guohong Chemical Co., Ltd
– 330 000 t/a, Jiangsu SOPO (Group) Co., Ltd
– 200 000 t/a, Ningxia Dadi Chemo-Industrial Co., Ltd
– 100 000 t/a, Xinjiang Qingsong Vinylon Chemical Co., Ltd
– 300 000 t/a, Hubei Yihua Group Co., Ltd
– 360 000 t/a, Changlian Chemical Co., Ltd
　 Most domestic vinyl acetate enterprises select the calcium carbide acetylene technology, while foreign firms generally choose the ethylene gas-phase method. The first one is easier to operate and assures lower production cost with the price difference between coal and oil expanding. But it requires high energy and is harmful to the environment. Most vinyl acetate is used in producing polyvinyl alcohol. Because of the undiversified consumption structure, a vinyl acetate industrial chain can hardly be established, leaving enterprises to struggle with market risks. As shares of conventional vinyl acetate products are stable, vinyl acetate downstream products might be oversupplied, while some high-end vinyl acetate products have to be imported.