China’s BDO Production Boosted by Downstream Demand

By Li Feng, S. J. Chem Co., Ltd.

1,4-butanediol (BDO) is used for the production of polybutylene terephthalate (PBT), γ-butyrolactone (GBL), polyurethane (PU), tetrahydrofuran (THF), polytetrahydrofuran (PTMEG), copolyester ethers (COPEs), N-methylpyrrolidone (NMP), polyvinylpyrrolidone and so on. It can also be used for the synthesis of vitamin B6, pesticides, herbicides, solvents, moisturizers, plasticizers, curing agents, pharmaceutical intermediates, chain extenders and adhesives. The application industries of BDO include pharmaceuticals, coatings, plastics, leather, ink and electroplating.

I. Production develops rapidly

China’s BDO production has developed rapidly since 2000. In the June of 2002, a 25 kt/a BDO production unit in Shanxi Sanwei Group Co., Ltd. was put into operation. The unit was imported from International Specialty Products Inc of U.S.A. (ISP, formerly known as GAF Corporation) and it is based on a low pressure slurry bed Reppe process upgraded from the technology of GAF Corporation. From 2005 to 2012, the development of China's BDO industry presented three distinguishing features - intensive construction, improved competitiveness and obvious scale effects. The total BDO capacity in China reached 606 kt/a in 2012, raising 25.44% year on year from 2005 to 2012. China's BDO industry has developed rapidly in recent years because: (1) the consumption of PU products is promoted by the boom of the automotive and electronics industries; (2) the demand for spandex in the garment industry, one of the first industries which have overcome the impact of the financial crisis, has increased; (3) the applications of BDO in traditional consumption fields have developed well. The statistics of China's BDO production from 2005 to 2012 is shown in Table 1.
Table 1 China's BDO production 2005 - 2012
Year    Capacity (kt/a)    Output (kt)    Operation rate (%)
2005    124    55    44.35
2006    149    98    65.77
2008    209    144    68.90
2009    349    180    51.56
2010    446    260    58.30
2011    501    285    56.89
2012    606    -    -

II. Technologies mature gradually

Currently, there are four processes to produce BDO in an industrial scale: (1) Reppe process which uses formaldehyde and acetylene as raw materials; (2) butylene acetoxylation process which uses butylene and acetic acid as feedstock; (3) epoxypropane (or propenol) process which uses epoxypropane (or propenol) as the raw material; (4) n-butane (or maleic anhydride) process which uses n-butane (or maleic anhydride) as the raw material.
   China's BDO industry has entered a period of rapid development since 2000, and several manufacturing technologies including Reppe process, maleic anhydride process and propenol process have been introduced to China. Up to now, the BDO capacity of Reppe process is 295 kt/a, accounting for 48.6% of the national total; that of maleic anhydride process is 275 kt/a, accounting for 45.38% of the national total; that of propenol process is 36 kt/a, accounting for 5.94% of the national total. Since most of China’s BDO producers have raw material resources such as acetylene, hydrogen and formaldehyde, the Reppe process will be perfect for them. For producers which have enough maleic anhydride, they prefer to adopt maleic anhydride process.

III. Traditional downstream industries grow steadily

In China, BDO is mainly used to produce PBT, GBL, THF, PU, PTMEG, etc. The production and consumption of BDO from 2005 to 2011 in China are shown in Table 2.

Table 2 Production and consumption of BDO in China 2005 - 2011 (kt, %)
Year    Output    Net imports    Apparent consumption    Self-sufficiency rate
2005    55    86    141    39.00
2006    98    68    166    59.04
2008    144    108    252    57.14
2009    180    135    315    57.14
2010    260    85    345    75.36
2011    285    82    367    77.76

   As can be seen from Table 2, the self-sufficiency rate of BDO in China has increased gradually, because: (1) the Reppe process dominates in China, where acetylene and formaldehyde are abundant, and the productions costs are much less influenced by the fluctuation of the international crude oil prices; (2) maleic anhydride is abundant in China; (3) producers in China have mastered the technology of formaldehyde production using iron-molybdenum oxide catalyst.
   According to statistics, new BDO capacity to be constructed in China before 2015 is about 755 kt/a: the capacity of Reppe process is 550 kt/a, accounting for 72.85%; the capacity of maleic anhydride process is 205 kt/a, accounting for 27.15%. BDO projects to be built before 2015 are listed in Table 3.

Table 3 BDO projects to be built before 2015 in China (kt)
Company    Capacity    Process    Catalyst for formaldehyde production
Dongying Shengli Zhongya Chemical Co., Ltd.    55    maleic anhydride    -
Sichuan Tianhua Fubang Chemical Industry Co., Ltd.    60    Reppe    iron-molybdenum oxide
Guodian Younglight Energy Chemical Group Co., Ltd.    100    Reppe    Ag
Sinopec Yizheng Chemical Fibre Co., Ltd.    100    maleic anhydride    -
Zibo Jiazhou Chemcical Co., Ltd.    50    maleic anhydride    -
Chongqing Jianfeng Industry Co., Ltd.    60    Reppe    Ag
Xinjiang MarkorChem    100    Reppe    iron-molybdenum oxide
Henan Kaixiang Chemical Co., Ltd.    50    Reppe    iron-molybdenum oxide
Inner Mongolia Dongyuan Technology Co., Ltd    60    Reppe    -
Shaanxi Delin Chemical Co., Ltd.    60    Reppe    -
PetroChina Daqing    60    Reppe    Ag
   
Driven by the boom of the industries such as textile and garment, automotive and electronics, downstream production units of BDO go into operation gradually. Thus the demand for BDO is expected to increase fast. However, it is worth noting that on the one hand, China’s spandex industry, the most important downstream industry of BDO, is reaching maturity; on the other hand, the demand for BDO to produce PTMEG is not expected to grow significantly due to the slow growth of the PTMEG industry.
   The global demand for PBT begins to increase due to the recovery of the automotive and electronics industries. The increase is even faster in China. In the future, the growth of the demand for BDO will heavily depend on the fast developing PBT industry.
   Moreover, new downstream products of BDO, such as polybutylene succinate (PBS), PTMEG, thermoplastic polyester elastomer (TPEE) and PU, have become more and more important and will have a bright future in China.