Bisphenol A Market in China, 2015
Year:2016 ISSUE:20
COLUMN:ORGANICS
Click:315    DateTime:Nov.07,2016
Bisphenol A Market in China, 2015

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

Supply

At the end of 2015, China was host to 1.15 million t/a of bisphenol A capacity and the year’s output was 795 kt, an increase of 37.1% over the previous year. Capacity utilization was 69.1%, 8.8 percentage points lower than in the previous year.
There were eight producers. During the year, ChangChun Chemical (Jiangsu) Co., Ltd. expanded its capacity by 135 kt/a to 270 kt/a, and the combined new capacity of Formosa Chemical Industries (Ningbo) Co., Ltd. and Shandong Lihuayi Group Co., Ltd. was 270 kt/a. Table 1 shows the major producers.
New capacity planned for construction in the next few years includes a 240 kt/a unit of Sinopec SABIC (Tianjin) Petrochemical Co., Ltd., a 130 kt/a unit of Jiangsu Haili Chemical Industry Co., Ltd. and a 120 kt/a unit of Jiangsu Ruisheng New Material Technology Co., Ltd. These projects have progressed slowly and are highly uncertain.

Table 1    Major bisphenol A producers in China, 2015

Producer    Capacity
(kt/a)    Startup
time
Bayer (Shanghai) Co., Ltd. (JV between Covestro and Shanghai Chlor-Alkali Chemical Co., Ltd.)    210    2006
Sinopec Mitsubishi Polycarbonate (Beijing) Co., Ltd.    150    2011
ChangChun Chemical (Jiangsu) Co., Ltd.    270    2013
Shanghai Sinopec Mitsui Chemicals Co., Ltd.    120    2008
BlueStar Nantong Xingchen Synthetic Material Co., Ltd.    90    2010
Kingboard Chemical Holdings Ltd. (Guangdong Huizhou Zhongxin Chemical Co., Ltd.)    40    2014
Formosa Chemical Industries (Ningbo) Co., Ltd.    150    2015
Shandong Lihuayi Group Co., Ltd.    120    2015
Total    1 150    ?


Table 2    Consumption of bisphenol A in China during 2011-2015  (kt)

Year    Output    Import
volume    Export
volume    Apparent
consumption    Self-sufficiency
(%)
2015    795    534    0.5    1 329    59.8
2014    580    496    1.0    1 075    53.9
2013    560    586    0.4    1 146    48.9
2012    515    539    0.3    1 054    48.9
2011    395    581    6.0    970    40.7



Demand

Apparent consumption of bisphenol A in 2015 was 1.33 million tons in China, an increase of 23.6% over the previous year, and self-sufficiency was 59.8%, 5.7 percentage points higher than in the previous year. Driven by demand, apparent consumption grew quite rapidly in recent years. Table 2 shows the details.
The apparent consumption of bisphenol A in China has increased steadily for some time. The average annual growth of consumption reached 4.0% during 2011-2015. In China bisphenol A is mainly used to produce epoxy resins and polycarbonates. Small amounts are also used to produce polysulfone resins, polyphenyl ether resins and unsaturated polyester resins. It can also be used in the production of fine chemicals such as plasticizers, flame-retarding agents, antioxidants, heat stabilizers, rubber antioxidants, pesticides and coatings.
Epoxy resins: Applications of epoxy resins in China include mainly the manufacture of coatings, copper clad laminates and wind turbine blades.
Growth in the investment and construction of transportation infrastructure such as containers, ships and bridges in recent years has greatly promoted the application of epoxy resins in coatings.
The printed circuit board sector has grown at an average annual rate of over 15% in recent years, driving a drastic increase of demand for electronics-grade epoxy resins.
Wind power is the electricity generation mode with the most mature technology and the brightest prospects for large-scale development and commercialization, except for hydro power. More wind power capacity will be installed. Reinforcing resins used in wind turbine blades today are mostly epoxy resins. The growth of demand for epoxy resins in this sector will also push the consumption of bisphenol A.
Polycarbonates: In China, the demand for polycarbonates in making compact discs will shrink gradually, but rapid development in the automotive, electronic/electric and construction sectors will still drive rapidly increasing demand for polycarbonates. China’s dependence on imported polycarbonates still exceeds 75% today, constituting a huge market opportunity, so demand for bisphenol A in making polycarbonates will increase steadily.
The increase in demand for bisphenol A arises mainly from growing consumption of epoxy resins and polycarbonates. Apparent consumption of bisphenol A is expected to be 1.40 million tons 2016.

Foreign trade

China imported 534 kt of bisphenol A in 2015, an increase of 7.7% over the previous year – the import value was US$627.88 million, a drop of 27.9%. Only 0.5 kt was exported, a drop of 56.3% from the previous year.
Domestic capacity expansion did not inhibit the import of goods. Import dependence was 40.2% in 2015. Major import sources included Korea, Thailand and Taiwan. Nearly 80% of the total import volume came from the three sources – 151 kt (28.3%) from Thailand; 148 kt (27.8%) from Korea; 117 kt (22.0%) from Taiwan. Imports from the three sources all increased YoY.
The region accepting the largest amount of imported bisphenol A was Shanghai, taking 34.6% of the total. Jiangsu came next, taking 22.4%. China exported very little bisphenol A – only 0.5 kt in 2015, a drop of 56.3% YoY.

Market price

Bisphenol A prices plummeted almost to RMB7 100/t in August 2015, the lowest since 2010. At the end of October, prices dropped once to RMB6 600/t, below the all-time low. Figure 1 shows the price trend of bisphenol A in China in 2015.
Bisphenol A prices in China declined overall in 2015. Prices of raw material phenol plunged to an all-time low because three new upstream phenol/acetone units started production smoothly during the year. Consequently, bisphenol A makers cut prices. Moreover, much new bisphenol A capacity went on stream, as mentioned above, and importers remained very active, so the market supply increased YoY. Downstream, the epoxy resin sector developed slowly, epoxy resin sales were only average and the sector’s demand for bisphenol A did not increase. Downstream in the polycarbonate sector, capacity increased, but operations were quite unstable and the sector’s demand for bisphenol A increased only a little.
Dramatic capacity expansion in the polycarbonate and epoxy resin sectors will increase the demand for bisphenol A. With drastic capacity expansion in the phenol/acetone sector upstream, the raw material price can be expected to drop in fierce market competition, reducing the cost of producing bisphenol A and increasing the profit margin. The imminent emergence of a group of chemical enterprises that own an integrated industrial chain of phenol, acetone, bisphenol A and epoxy resins will also facilitate the development of the entire bisphenol A sector.