CPL Industry Must Adjust Structure
Year:2015 ISSUE:14
COLUMN:ORGANICS
Click:250 DateTime:Aug.20,2015
CPL Industry Must Adjust Structure
By Song Chao, Technology Center of Sinopec Baling Petrochemical Co., Ltd.
Rapid growth of capacity
As of the end of 2014, China had 12 caprolactam (CPL) producers with a total capacity of 2 350 kt/a (excluding the units being built by Fujian Shenyuan New Material Co., Ltd., Fujian Jinjiang Technology Co., Ltd., Risun Chemical Co., Ltd. and Henan Pingmei Shenma Group, etc.). China’s CPL producers during 2011-2014 are listed in table 1. In recent years, the number of CPL enterprises and their capacity have both grown rapidly. In 2011, China had only four CPL producers with a combined capacity of 585 kt/a, but by 2014, there were 12 producers, with 3.2 times that much capacity.
In recent years, annual growth rates of capacity and output have both exceeded 20%, the import volume has been reduced significantly, and CPL self-sufficiency has increased constantly. However, while capacity expanded rapidly, operating rates decreased significantly. The overall operating rate was less than 60% in 2012, only 65.82% in 2013, and still lower in 2014.
Table 1 China’s CPL producers, 2011-2014 (kt/a)
Producer Capacity
in 2011 Capacity
in 2012 Capacity
in 2013 Capacity
in 2014 Remarks
Sinopec Baling Petrochemical Co., Ltd. 200 300 300 300 Using cyclohexanone ammoximation
technology
DSM Nanjing?Chemical Co., Ltd. 200 200 400 400 Using cyclohexane process technology
Sinopec Shijiazhuang Refining & Chemical Co., Ltd. 160 160 160 200 Using toluene method + cyclohexanone ammoximation technology
Zhejiang Juhua Co., Ltd. 25 50 50 150 Using cyclohexane process technology
Baling Hengyi Group Co., Ltd. -- 200 200 200 Using cyclohexanone ammoximation
technology
Shandong Hongye Group -- 100 100 200 Using cyclohexanone ammoximation
technology from ENI of Italy
Shandong Haili Chemical Industry Co., Ltd. -- 200 400 400 Using cyclohexene process technology
Hubei?Sanning?Chemical Co., Ltd. -- -- 100 100 Using cyclohexane process technology
Luxi Chemical Co., Ltd. -- -- 100 100 Using cyclohexene process technology
Fujian Tianchen Yaolong New Material Co., Ltd. -- -- -- 200 Using cyclohexane process technology
Inner Mongolia Qinghua Group -- -- -- 100 Being completed but not put into operation
Shanxi Lanhua Sci-tech Venture Co., Ltd. -- -- -- 100 Being completed but not put into operation
Total 585 1 210 1 810 2 350
Table 2 China’s CPL producers and industrial chain
Producer Location CPL Adipic acid Chip/
spinning Others Remarks
Sinopec Baling Petrochemical Co., Ltd.
Yueyang, Hunan province √ √ √ Synthetic rubber, epoxy resin, gasoline, diesel and chemical fertilizers Sinopec, oil refining and chemicals
DSM Nanjing Chemical Co., Ltd. Nanjing, Jiangsu province √ √ Jointly owned by DSM, Sinopec Nanjing and Jiangsu Guoxin Group
Sinopec Shijiazhuang Refining & Chemical Co., Ltd. Shijiazhuang, Hebei province √ √ √ Gasoline, diesel, aviation kerosene, LPG, polypropylene and benzaldehyde Sinopec, oil refining and chemicals
Zhejiang Juhua Co., Ltd. Quzhou, Zhejiang province √ Polytetrafluoroethene, refrigerant R134a, hexafluoropropylene and ion-exchange?membrane caustic soda Fluorine chemicals, chlor-alkali chemicals, petrochemicals and fine chemicals
Baling Hengyi Group Co., Ltd. Hangzhou, Zhejiang province √ √ √ PTA, PET and polyester fiber JV between Sinopec Baling Petrochemical and ?Zhejiang Hengyi?Group, chemical fibers and chemicals
Shandong Hongye Group Heze, Shandong province √ √ √ Coal coking and polyurethane Coal chemicals and petrochemicals
Shandong Haili Chemical Industry Co., Ltd. Zibo, Shandong province and Dafeng, Jiangsu province √ √ √ Epichlorohydrin Petrochemicals
Luxi Chemical Co., Ltd. Liaocheng, Shandong province √ Chlor-alkali, sulfuric acid and urea Chemical fertilizers and chemicals
Hubei?Sanning?Chemical Co., Ltd. Zhijiang, Hubei province √ Ammonia, nitrogen fertilizer, phosphate fertilizer and compound fertilizer, sulfuric acid, phosphoric acid, nitric acid and hydrochloric acid Coal chemicals, phosphorus chemicals, petrochemicals and fine chemicals; Shanxi Jincheng Anthracite Coal Mine has a majority interest in the company
Fujian Tianchen Yaolong New Material Co., Ltd. Fuqing, Fujian province √ Soda ash, ammonium chloride and nitric acid JV between China Tianchen Engineering Corporation and Fuzhou Yaolong Chemical Group
Inner Mongolia Qinghua Group Alashan, Inner Mongolia √ Coal tar, crude benzol, sulfur ammonia, sulfur sulfonate and methanol Ore dressings, coke, coal chemicals, iron and steel, and building materials
Shanxi Lanhua Sci-tech Venture Co., Ltd. Zezhou, Shanxi province Anthracite coal, urea, synthetic ammonia, methanol and dimethyl ether Coal chemicals and chemical fertilizers
The industry needs
structural adjustments
Over time, the ownership of CPL enterprises has developed from the state-owned enterprises to various forms of enterprises like private firms and joint ventures. Coal chemical enterprises, chemical fertilizer enterprises and chemical fiber enterprises have entered the CPL sector. For example, Shanxi Lanhua Sci-tech Venture Co., Ltd., Hubei Sanning Chemical Co., Ltd. and Inner Mongolia Qinghua Group are coal chemical enterprises, Zhejiang Juhua Co., Ltd., Shandong Haili Chemical Industry Co., Ltd. and Luxi Chemical Co., Ltd. are chlor-alkali chemical enterprises, while Baling Hengyi Group Co., Ltd. is a chemical fiber enterprise. China’s CPL producers and industrial chain are shown in table 2.
New entrants into the CPL business are inevitably burdened by the sector’s problems of imperfect industrial chains and redundant capacity. The explosive growth of capacity has sharply constrained profitability, market competition has become fiercer, and adjustments to the industry’s structure are now imperative.
Table 3 China’s supply and demand for CPL & PA6, 2010-2014
Year CPL capacity
(kt/a) CPL output
(kt) Consumption of PA6
chips (kt) Import of PA6
chips (kt) Import of PA6
fibers (kt) Demand for
CPL (kt)
2010 575 493.9 1 680.4 580.4 124.2 1 804.6
2011 585 536 1 781.2 544.6 118.0 1 899.2
2012 1 210 715 1 888.1 598.2 112.1 2 000.2
2013 1 810 1 191 2 001.4 630.2 106.5 2 107.9
2014 2 350 1 540 2 290 540 150 2 440
Consumption
Most of the CPL used in China goes into producing PA6 fibers and PA6 engineering plastics. Making PA6 fibers takes around 80% of the total. Major non-fiber applications of PA6 include general civil plastics, engineering plastics (mainly for cast-molding components used in automobiles and electric appliances) and bi-oriented nylon films, and the demand for CPL in PA6 for non-fiber uses accounts for around 18.0% of the total. Other sectors consume around 2.0%.
As the automotive and textile sectors grow, the demand for PA products also increases constantly. Therefore, in recent years, China has not only imported a large amount of CPL, but also imported PA6 chips and fibers. China’s supply and demand for CPL and PA6 during 2010-2014 are detailed in table 3. In 2010, China imported 580.4 kt of PA6 chips – exceeding the domestic output of 493.9 kt. In 2013, China imported 630.2 kt of PA6 chips, equal to 50% of domestic CPL output. In 2014, China imported more than 500 kt of PA6 chips, because the structure of the domestic CPL industry is unmatched with that of PA6 chip makers, and the product quality does not meet the market’s requirements.