China’s MMA Market in 2014

By Li Min, China National Chemical Economic and Technical Development Centre

1. Supply

In 2014, China’s methyl methacrylate (MMA) capacity and output reached 83 kt/a and 358 kt, respectively, up 32.8% and 3.2% YoY, and the average operating rate was 43.1%.
As of the end of 2014, China hosted 12 MMA enterprises, located mainly in East China. In May 2014, Shandong Dawei Plasticization Co., Ltd. announced that its 20 kt/a MMA unit was completed and put into trial production. Hongxu Chemical Co., Ltd. of Wanda Group completed its first phase 50 kt/a MMA unit and put it into trial production in 2014. However, neither unit delivered actual output to the market. Major MMA producers in China include PetroChina Jilin Petrochemical Co., Ltd., Mitsubishi Rayon Co., Ltd. and Evonik Degussa (China) Investment Co., Ltd., etc. China’s major MMA producers of 2014 are listed in Table 1.

Table 1    China’s major MMA producers, 2014

Producer    Location    Capacity
(kt/a)
Acrylonitrile Plant of PetroChina Jilin Petrochemical Co., Ltd.    Northeast China    200
Suzhou Anli Chemical Co., Ltd.    East China    17
Lucit International (China) Chemical Co., Ltd.     East China    93
Huizhou MMA Co., Ltd. of Mitsubishi Rayon Co., Ltd.    Central and
South China    100
Shandong Yidali Chemical Co., Ltd.    East China    10
Shandong Tianhong Chemical Co., Ltd.    East China    90
Jiangsu Shenghong Group (Sailboat Petrochemical)    East China    90
Foshan Hongxing Chemical Plant    East China    50
Evonik Degussa (China) Investment Co., Ltd.    East China    75
Dongying Dawei Shengrong Chemical Co., Ltd.     East China     20
Heilongjiang Zhongmeng Longxin Chemical Co., Ltd.    Northeast China    75
Chongqing Ziguang Xudong Chemical Co., Ltd.    Southwest China    10
Total        755


Table 2    Planned increament to China’s MMA capacity

Producer    Capacity (kt/a)    Startup date
CNOOC     70    2015
Lucit International (China) Chemical Co., Ltd.     80    2015
Shandong Yidali Chemical Co., Ltd.    100    2015
Lihuayi Weiyuan Chemical Co., Ltd.    100    2015
Total    350    

Table 3   China’s supply & demand for MMA, 2012-2014  (kt)

Year    Output    Import
volume     Export
volume    Apparent
consumption    Self-sufficiency rate
(%)
2014    358    275    50    583    76.8
2013    347    245    52    540    70.6
2012    345    239    47    537    69.3




Many companies plan to construct or expand MMA units, and it was conservatively estimated that 150 kt/a MMA capacity would be added during 2015, with growth exceeding 26% for the year. It is further expected that China’s capacity to produce MMA will exceed 900 kt/a by the end of 2016. CNOOC funded and constructed a petrochemical and fine chemical plant in Hainan province including a 70 kt/a MMA unit planned for operation by the end of 2015. Lucit International (China) Chemical Co., Ltd. plans to double the capacity of its MMA unit in Shanghai. Plans to add MMA capacity in China in the future are shown in Table 2.

2. Demand

Due to the growth of demand for the downstream product, polymethyl methacrylate (PMMA), the consumption of MMA has increased year-on-year. In 2014, China’s apparent consumption of MMA reached 583 kt, up 8.0% YoY. China’s supply of and demand for MMA in recent years are outlined in Table 3.
MMA is used mainly to produce PMMA, PVC rigid products, surface coatings, etc., and the makers of PMMA consume the largest share of MMA. Due to the unfavorable international economic situation and the slowdown of domestic economic growth, downstream producers have begun to use transparent polystyrene, at a lower price, to replace PMMA in order to reduce production costs. PMMA faces fierce competition from alternative materials in its mainstream application fields, and the prospects for MMA demand are worrying. Competition in MMA market will be fiercer, and MMA will not always be in high demand and highly profitable. It is expected that the apparent consumption of MMA will reach 625 kt by the end of 2016.

3. Import and export

In 2014, China imported 275 kt of MMA, up 12.2% YoY, and exported 50 kt, down 3.8% YoY. China’s import and export of MMA during 2012-2014 are shown in Table 4.
China imported MMA mainly from Thailand, Singapore and Taiwan province. The import volume from Thailand was largest, at around 85 kt or 31.1% of the total. Japan was the largest export destination, accounting for 16.1% of the total. Shanghai was the main exporting region, accounting for 60.0% of the total.

4. Market price

Since 2014, the international crude oil price has plummeted by over 48%, the price of acetone, the main raw material of MMA has also dropped by 43.7%, whereas the domestic MMA price has decreased by only 6.4%, and profits in the MMA sector have been very high. The ex-factory price trend of MMA for PetroChina Jilin Petrochemical Co., Ltd. in 2014 is charted in Figure 1.


Table 4   China’s import & export of MMA, 2012-2014

Year    Import    Export
    Volume
(kt)    YoY growth
(%)    Value
(US$ million)    YoY growth
(%)    Volume
(kt)    YoY growth
(%)    Value
(US$ million)    YoY growth (%)
2014    275    12.2    600.95    25.0    50    -3.8    96.75    -28.3
2013    245    2.5    480.71    -2.7    52    10.6    134.92    2.9
2012    239    -    493.94    -    47    -    131.10    -


The profitability of making MMA has always been high, and MMA prices grew in the first three quarters of 2014. In 2014, the domestic MMA market benefited from China’s dumping investigation on imported MMA. On June 18, 2014, the Ministry of Commerce of China (MOC) received a written petition for a dumping investigation, formally submitted by PetroChina Jilin Petrochemical Co., Ltd. and Heilongjiang Zhongmeng Longxin Chemical Co., Ltd. on behalf of the domestic MMA industry. On August 8, 2014 MOC announced that China would conduct a dumping investigation against imported MMA originating in Singapore, Thailand and Japan. The domestic price of MMA began to climb in June, soared in August, but dropped to the lowest level in recent years following the crude oil price decline in December 2014.
The domestic MMA market continued to fluctuate following the global conditions. Take the ex-factory price of MMA in PetroChina Jilin Petrochemical Co., Ltd. as an example: the average price of MMA in 2014 was RMB16 254/t.