Polycarbonate Supply and Demand Increase Rapidly in China

By Gao Liping, CNCIC

Polycarbonates (PC) are a group of linear thermoplastic polymers which can be divided into three categories: aliphatic, aromatic and aliphatic-aromatic copolymer. The most common PC material is produced by the reaction of bisphenol A (BPA) and phosgene. Among the five general-purpose engineering thermoplastics, only PC has good transparency (with a visible light transmittance of 90%). Other excellent properties of PC include impact resistance, creep resistance, high tensile strength and bending strength, large elongation at break, good rigidity, heat resistance and cold endurance. Although pure PC resin has poor solvent and abrasion properties, they can be improved by blending PC with other polymers. PC is widely used in making electrical components and electronics, data storage products, automobile parts, medical equipment, construction materials, textiles and packaging materials.

Production capacity continues to grow

The R&D of PC in China started in 1958, and industrial production started in 1965. Early PC producers in China include Shanghai Tianyuan Group Shenju Chemical Plant, Jiangsu Changlong Chemical Co., Ltd. and Chongqing Changfeng Chemical Plant. However, all of these producers stopped production one after another due to a series of problems such as small production scale, obsolete technologies, poor product quality, high production costs and poor competitiveness compared with foreign producers.
In 2005, Teijin Chemicals Ltd. built a wholly owned enterprise, Teijin Polycarbonate Co. Ltd., in Jiaxing city of Zhejiang province. The 50 kt/a PC project in Teijin Polycarbonate Co. Ltd. started operation in May 2005, and the capacity was expanded to 100 kt/a in December 2006. A 100 kt/a PC plant built by Bayer Polymer (Shanghai) Co., Ltd. started operation in November, 2006, and another 100 kt/a PC project of the company came on line in December 2008.
In 2012, two PC projects funded by Mitsubishi Chemical started operation in China. The first project, located in Beijing, is a 50/50 joint venture between Mitsubishi Chemical and Sinopec. It has a production capacity of 60 kt/a and started operation in February 2012. The second project, located in Shanghai, is wholly owned by Mitsubishi Chemical. It has a production capacity of 80 kt/a and started operation in May 2012.
As of the end of 2012, China's PC production capacity was 440 kt/a; the year’s output was 190 kt; but the operating rate was relatively low, at 42.7%.
In recent years, since PC is in short supply in China, many foreign producers have invested to construct new PC plants or expand their existing PC facilities. Mitsubishi Chemical’s wholly owned 80 kt/a PC plant (phase I of the whole investment) in Shanghai started operation in May, 2012. Once the phase I project runs smoothly, the company will launch the construction of the 120 kt/a phase II project. A new 60 kt/a PC project of Lihuayi Group is now installing equipment and will be put into operation at the end of 2013. A new 260 kt/a PC plant in Tianjin comprising two 130 kt/a production lines and set up as a joint venture of SABIC and Sinopec will be put into production in 2015. Bayer Material Science (China) Co., Ltd. will build a series of new production facilities in Bayer Integrated Site Shanghai (BISS) that can produce 200 000 tons of PC, 200 000 tons of BPA and 172 000 tons of diphenyl carbonate each year, expanding BISS’s production capacities for PC, BPA and diphenyl carbonate to 400 kt/a, 400 kt/a and 344 kt/a, respectively. In addition, Zhejiang Railway Dafeng Chemical group, a subsidiary of Zhejiang Railway Investment Group, is building a 100 kt/a PC project, planning to start operation in 2014. In the next five years, PC production capacity in China will increase about 800 kt/a.

Demand will increase

In 2011, affected by a series of national policies such as restrictive fiscal policy, tightened credit, housing and automobile purchase restrictions, as well as the sluggish global economy, the growth rate of PC consumption slowed to only 2%. However, with the recovery of downstream industries like automobiles, electronics, packaging and construction, in 2012, PC consumption increased greatly to 1.35 million tons, up 20% year-on-year. Among all the PC consumption in 2012, that used in the electrical and electronics industry accounted for 31%; construction, 25%; optical discs, 17%; automobile, 11%; packaging, 8%; others, 8%. It is estimated the average annual growth rate of PC consumption in China is about 7% in the next five years.

(1) Electrical and electronics

In China, the largest application field of PC is the electrical and electronics industry. PC can be used to produce shells, decorative surfaces, cases and frames for electronic equipment, as well as parts and accessories for household appliances such as hair dryers, coffee makers, microwave ovens, vacuum cleaners and refrigerators. It can also be used to produce shells and accessories for electric tools such as saws, drills and lawn mowers. Moreover, some parts of high-end cameras and watches are made from PC. In the future, the consumption of PC can be promoted by the popularization of flat-panel televisions, digital cameras, laptop computers and cell phones.

(2) PC sheets used in construction

Compared to glass which is traditionally used as a decorating and daylighting material, PC sheets have good light transmittance, UV-resistance and dimensional stability and many advantages such as impact resistance, weight and thermal insulation. The thermal insulation property of PC is 25% higher than that of glass; the impact resistance of PC is 250 times of that of glass; the density of PC is only half of that of glass. In recent years, PC sheets have been widely used in stair rails and daylighting features of large-area roofs and high-rise buildings.

(3) Data storage

A major application of polycarbonate is the production of optical storage discs including compact discs, DVDs, and blu-ray discs. The optical disc capacity in China is one fifth of the global total. However, with the rapid development of science and technology in flash memories and internet storage, the optical disc industry is facing challenges from other portable data storage media with large storage capacity in a small item. PC products made in China are unstable in performance and cannot be used to produce optical discs. Therefore, more than 90% of the PC consumed in the production of optical discs in China is imported, mainly made by Bayer, Mitsubishi, Teijin, SABIC and Chimei Corp.

Table 1   Import and export data of China’s PC industry from 2007 to 2012 (kt)

Year    Import volume    Export volume
2007    1 021                306
2008    1 017                279
2009    1 027                215
2010    1 264                295
2011    1 228                238
2012    1 375                212


(4) Automobile

Light weight, great appearance, safety, eco-friendly design and fuel-efficiency are common pursuits of modern automobile manufacturers. PC has been used more and more widely in automobiles because of its advantages like low density, low cost, attractive appearance, eco-friendliness, impact resistance and toughness. In the future, more and more automobile parts will be made from polymer materials, promoting the consumption of PC. In automobiles, PC can be used in lighting systems, dash boards, windshield heaters, bumpers, etc. The consumption of PC in China’s automobile industry in 2012 was about 150 kt.

(5) Packaging

PC can be used to make packages such as water barrels, beverage bottles, water bottles and baby bottles, among which the 20-liter water barrel has the largest consumption share. Due to their light weight, impact resistance, transparency and stability after containing hot water and washing with erosive solutions, PC bottles can replace glass bottles in most cases. However, in recent years, there is controversy about the possibility that PC bottles may release toxic BPA. Some countries like the United States and Canada banned PC from making baby bottles. It is estimated that the demand for PC from the packaging industry will decrease in the future, especially in packages for hot drinks.

(6) Other fields

The application fields of PC are widening due to its excellent performance and processibility. It can also be used in medical equipment, textiles and optical lenses, and in the aerospace and aviation fields. Medical equipment using PC includes equipment parts, medical trays, trolleys and blood collection containers. For the textile industry, PC can be used to make bobbins. Lenses made from optical-grade PC can be used in cameras, microscopes, telescopes and optical instruments. PC can also be used in parts of airplanes and spacecrafts.

Supply deficit of PC
is still big

Over the years, since the PC output cannot fulfill the domestic demand, the import volume of PC has increased rapidly. Affected by the global economic crisis, the import volume in 2008 decreased slightly to 1.017 million tons from 1.021 million tons in 2007. From 2009 to 2010, the import volume resumed growth, while it decreased slightly in 2011 due to the weak domestic demand. In 2012, the domestic demand for PC climbed dramatically, promoting the import volume to 1.375 million tons, up 12% year-on-year.
The export volume of PC from China increased to 306 000 tons in 2007 from 132 000 tons in 2005, mainly because GE Plastics (now SABAIC’s Innovative Plastics) set up a wholly owned PC granules plant in Guangzhou, and production facilities of Teijin and Bayer reached designed capacity. In the next few years, the export volume decreased due to the unchanged domestic output and growing supply deficit. The export volume in 2012 was 212 000 tons.
In the past five years, although the apparent consumption of PC in China increased at an average annual growth rate of 8.8%, the domestic output increased only 1.8% annually and self-sufficiency decreased from 19.6% to 14%. In the next few years, with the fast development of industries like automobiles, electronics, electrical and construction, the consumption of PC in China will increase greatly. It is estimated that in 2017, domestic output will exceed 800 000 tons, with a supply deficit of at least 1 million tons and self-sufficiency above 40%.