Acrylonitrile Sector: Seek New Opportunities in Changes

By Xiao Ming

In June 2016 the total capacity for making acrylonitrile in China reached 2.08 million t/a. The capacity of Sinopec (including joint venture enterprises) was 1.07 million t/a, accounting for around 51.52% of the total. The capacity of PetroChina was 739 kt/a, accounting for around 35.58% of the total. Shanghai SECCO Petrochemical Co., Ltd. is the biggest acrylonitrile producer in China today, and its capacity is 520 kt/a, accounting for around 25.04% of the total. PetroChina Jilin Petrochemical Co., Ltd. comes next, and its capacity is 452 kt/a, accounting for around 21.76% of the total. Table 1 shows the major producers of acrylonitrile in China in 2016.

Increase of self-sufficiency and sustained decline of price

With the constant increase of the capacity and the output, the amount of acrylonitrile imported to China has fallen year by year. According to customs statistics, 397.9 kt was imported in 2015, a drop of around 23.17% from the previous year. The import amount was 121.4 kt during January-April 2016, a drop of 25.84% from the same period of last year. Table 2 shows the import and export of acrylonitrile in China during 2011-2016.
Sources for the import of acrylonitrile to China are still mainly concentrated in the United States, Korea and Taiwan. The total amount imported from these three sources reached 377.8 kt in 2015, accounting for around 94.95% of the total, being 16.75 percentage points lower than the previous year.
With the constant development of related sectors such as acrylic fiber and ABS, the apparent consumption of acrylonitrile in China keeps going up. It was 1.49 million tons in 2007 and increased to 1.66 million tons in 2011. Due to the drastic reduction of the import volume, the apparent consumption in 2015 was around 4.01 percentage points lower than the previous year. Self-sufficiency was 70.95% in 2007, 67.28% in 2011 and 77.87% in 2015.
The consumption pattern of acrylonitrile in China is basically stable. Acrylonitrile is mainly used to produce acrylic fiber, ABS/SAN, acrylamide and NBR. The consumption structure in 2015 was around 36% in acrylic fiber, around 34% in ABS/SAN, around 22.5% in acrylamide, around 2.5% in NBR and around 5% in others.
The market price of acrylonitrile in China has declined constantly in recent years. The price peaked at RMB14 870/t in October 2014. It started to come down afterwards. The market price was basically stabilized at RMB8 100/t up to April 2016. As acrylonitrile units that started production in 2015 will operate normally 2016, the growth of demand will slow down, the price of raw material propylene will come down due to the price drop of crude oil and the price of imported goods will also decline. It is expected that the market price of acrylonitrile will remain relatively low for a considerable period of time in future.

Massive industrial changes triggered by multiple factors

1. Main producers to diversify gradually
Quite a few new or expanded acrylonitrile units in China will be completed and put on stream during 2016-2020. Tianjin Bohai Chemical Industry Group Co., Ltd. plans to form a joint venture with Ineos Nitriles (each holding 50% stakes) to construct a 260 kt/a acrylonitrile unit in Tianjin. Products will mainly be provided for the downstream ABS unit of the company. The unit will be completed and put on stream in 2016. The second-phase 130 kt/a acrylonitrile unit of Shandong Korur Chemical Co., Ltd. will be completed and put on stream in 2016. The total acrylonitrile capacity of the company will reach 260 kt/a at that time. Guangxi Keyuan New Material Co., Ltd. plans to construct a 200 kt/a acrylonitrile unit to provide raw material to its 400 kt/a ABS project in Fangchenggang. The unit will be completed and put on stream in 2016. Shandong Haili Group plans to construct a 130 kt/a acrylonitrile unit to provide raw material to its 500 kt/a ABS unit. In addition, CNOOC plans to construct a 200 kt/a acrylonitrile unit in its Hainan Dongfang fine chemical second-phase project. Qinghai Qinghua Group also plans to construct a 300 kt/a acrylonitrile unit. If these projects are all executed as planned, the total capacity of acrylonitrile in China is expected to reach 3 million t/a in 2020. With the entry of private enterprises (Shenghong Group and Shandong Wanda) and foreign enterprises (BP and Ineos), the monopoly of the acrylonitrile production in hands of Sinopec and PetroChina will be broken. The main investors and market players will gradually diversify.

Table 1     Major producers of acrylonitrile in China in 2016

Producer    Capacity (kt/a)    Remark
PetroChina Daqing Petrochemical Co., Ltd.    80    Matched production of acrylic fiber and ABS
PetroChina Daqing Refining & Chemical Co., Ltd.    80    Matched production of polyacrylamide and acrylamide
PetroChina Jilin Petrochemical Co., Ltd.    452    Capacity expanded by 240 kt/a in 2010, matched production of ABS
PetroChina Fushun Petrochemical Co., Ltd.    92    Matched production of acrylic fiber
PetroChina Lanzhou Petrochemical Co., Ltd.    35    Matched production of NBR and ABS
Subtotal    739    
Sinopec Shanghai Petrochemical Co., Ltd.    130    Matched production of acrylic fiber
Sinopec Anqing Petrochemical Co., Ltd.    210    Capacity expanded in 2012, matched production of acrylic fiber
Sinopec Qilu Petrochemical Co., Ltd.    80    Capacity expanded in 2011, matched production of acrylic fiber
Shanghai SECCO Petrochemical Co., Ltd.    520    Constructed in 2015
Shandong Korur Chemical Co., Ltd.    130    Started production in 2014, matched production of polyacrylamide and MBS
Subtotal    1 070    
Qitai Chemical Co., Ltd.    8    
Jiangsu Sailboat Petrochemical Co., Ltd.    260    Constructed in 2015
Others    268    
Total    2 077    



2. Pattern of consumption transforming
Making acrylic fiber has always been the biggest use of acrylonitrile in China. The development of the acrylic fiber sector has been quite slow in recent years however. On one hand, there is a considerable price difference between acrylic fiber and polyester fiber and some market share of acrylic fiber has been taken by polyester fiber. On the other hand, the acrylic fiber sector has always been slack and the capacity to make it is shrinking. There are no plans for construction or expansion of acrylic fiber units in China in the next few years. The downstream consumption structure of acrylic fiber will see no big changes. Demand will therefore be quite stable. It is expected that the proportion of acrylonitrile consumed in making acrylic fiber will come down to around 32.0% in 2020.
With the constant development of related sectors such as automobiles, China’s ABS capacity has increased steadily in recent years. Quite a few ABS units will be completed and put on stream in next few years, such as the second-phase 150 kt/a unit of CNOOC & LG Petrochemicals Co., Ltd., the 160 kt/a unit of Shanghai Huayi Polymer Co., Ltd., the Guangxi-based 400 kt/a unit of Ningbo Keyuan Plastics Co., Ltd. and the 500 kt/a unit of Shandong Haili Group. It is expected that the proportion of acrylonitrile consumed in making ABS/SAN will go up to around 37.0% in 2020. ABS will overtake acrylic fiber to become the biggest use of acrylonitrile in China.
Acrylamide is an organic chemical raw material with extensive applications. Polyacrylamide is the variety used most often. Polyacrylamide is the polymer flocculating agent for organic synthesis with the most extensive application, the best effect and the highest application volume in China today. With the constant expansion of application scope, demand for polyacrylamide will further increase in four major application sectors – oil recovery, ore recovery, papermaking and water treatment. It is expected that the proportion of acrylonitrile consumed in making acrylamide will go up to 24.0% in 2020.
NBR has gained extensive applications in the automotive, aviation/spaceflight, oil recovery, textile, electric wire/cable and printing sectors owing to its excellent oil-resisting, heat-resisting and physical/mechanical properties. Quite a few new or expanded NBR units will be completed and put on stream in the next few years by INSA GPRO (Nanjing) Synthetic Rubber Co., Ltd., Joint Venture of Sibure of Russia and Sinopec, China BlueStar (Tianjin) Petrochemical Co., Ltd. and Anhui Anqing Hualan Technology Co., Ltd. If these units are all completed or put on stream as planned, the proportion of acrylonitrile used in making NBR is expected to go up to 2.8% in 2020.
When the demand from makers of adipic dinitrile, adipic diamine, water repellents, adhesives, other products of organic synthesis, medicines and aprotic polar solvents is added, the total demand for acrylonitrile in China is expected to reach 2.2-2.3 million tons in 2020.

3. Changes brewing in production/sales pattern
The volume of acrylonitrile imported to China will likely decline constantly in the next few years. Big users of the imported goods are mostly Chinese-foreign joint ventures or wholly foreign-owned enterprises, as they need to use some of acrylonitrile produced by their own countries. Imported goods can therefore hardly be totally replaced by domestic goods. To maintain a stable growth of foreign trade and optimize the commodity structure in import and export, the Ministry of Commerce and the General Administration of Customs have adjusted the catalogue of prohibited commodities. The processing trade of acrylonitrile was prohibited from January 1, 2015 and the stock of imported goods was reduced. The total amount of acrylonitrile imported through processing trade was only 9.7 kt in 2015, a drop of around 88.25% from the previous year.

Table 2    Import of acrylonitrile in China during 2011-2016

Year    Import
    Volume (kt)    Value (US$ million)
2011    541.7    1 250.33
2012    555.4    1 041.05
2013    547.6    982.75
2014    517.9    1 001.725
2015    397.9    556.78
January-April 2016    121.4    117.43



With the completion of several new or expanded units in recent years, acrylonitrile capacity in China has developed rapidly. Demand growth is however not as rapid. So operating rates of enterprises has slid drastically. In the acrylonitrile sector the supply is in surplus, the era of fat profits is over – profits are thin and competition is fierce.
Implementation of the “Catalogue of Hazardous Chemicals (2015 Edition)” formulated and issued by the State Administration of Work Safety in collaboration with relevant departments started on May 1, 2015. Acrylonitrile was downgraded from acute-toxicity hazardous chemical to general hazardous chemical. In acrylonitrile and downstream markets, after the change the circulation of acrylonitrile will be more smooth and brisk. Nevertheless, the possibility for sales pressures caused by the inflow of imported goods should not be ruled out. New changes of the acrylonitrile production/sales pattern will be brewing.