Polyacrylamide Market in China, 2015

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

Supply

By the end of 2015, China’s polyacrylamide (PAM) capacity had grown to 1.20 million t/a. Output was 850 kt, an increase of 2.4% over the previous year. Capacity utilization was over 70%. Production and sales are basically balanced today with supply shortage in individual sectors. Table 1 shows the major PAM producers in China in 2015.
PAM production is concentrated mainly in Heilongjiang, Shandong, Beijing and Anhui. Heilongjiang has the most capacity, at 170 kt/a – that is 14.2% of the national total. Shandong comes next at 160 kt/a, or 13.3% of the total. Seven producers have individual capacity exceeding 50 kt/a, and their combined capacity accounts for around 54% of the national total. Figure 1 shows the PAM capacity and output in recent years.
Structural surplus burdens the production and supply of PAM in China today. Low-end anionic PAM is oversupplied, whereas for cationic PAM, the market and the capacity are both quite small. Competition is concentrated mainly in the low-end market. The domestic supply of high-end cationic PAM is inadequate, so it must be imported.

Table 1    Major PAM producers in China, 2015

Region    Producer    Capacity (kt/a)
Beijing    Beijing Hengju Chemical Group Corporation    100
Hebei    Zhangjiakou Maier Biochemical Co., Ltd.    10
Hebei    Huabei Petroleum Guangda Petrochemical Co., Ltd.    10
Hebei    Hebei Tianshi Chemicals Co., Ltd.    50
Heilongjiang    PetroChina Daqing Refining & Chemical Co., Ltd.    170
Jiangsu    SNF (China) Flocculant Co., Ltd.    100
Jiangsu    Jiangsu Nantian Flocculant Co., Ltd.    15
Zhejiang    Zhejiang Xingyong Biochemical Co., Ltd.    10
Anhui    Anhui Tianrun Chemicals Co., Ltd.    40
Anhui    Anhui Jucheng Fine Chemicals Co., Ltd.    60
Shandong    Shandong Bomo Biochemical Co., Ltd.    50
Shandong    Shandong Wanda Group    20
Shandong    Shandong Dongying Nuoer Chemical Co., Ltd.    70
Shandong    Dongying Guangzheng Chemicals Co., Ltd.    10
Shandong    Shandong Puyang Group Co., Ltd.    5
Shandong    Dongying Shengli Chemicals Co., Ltd.    5
Henan    Henan Zhengzhou Zhengli Polymer Technology Co., Ltd.    10
Henan    Puyang Longquan Polymer Co., Ltd.    5
Henan    Zhengzhou Zhengjia Green Energy Technology Co., Ltd.    35
Henan    Xinxiang Boyuan Water-Purifying Materials Co., Ltd.    3
-    Others    395
-    Total    1 200



Demand

The apparent consumption of PAM in China was 799 kt in 2015, an increase of 6.2% over the previous year. Table 2 shows the consumption of PAM in China in recent years.
In China today, oil extraction is the sector that consumes the most PAM, accounting for 57% of all demand in 2015. Many large oilfields in China such as Daqing Oilfield, Shengli Oilfield, Zhongyuan Oilfield, Huabei Oilfield, Liaohe Oilfield and Dagang Oilfield have already entered the middle or late period of extraction. To stabilize the output from these oilfields, tertiary extraction technology is usually used. Daqiang Oilfield has already fully employed polymer displacement technology. Also, Shengli Oilfield and Liaohe Oilfield have tested polymer displacement, achieving satisfactory output increases. So the proportion of PAM consumed in the oilfields will very likely decline in the future.
Water treatment is the second major use of PAM in China, accounting for 27% of demand in 2015. Most municipal sewage treatment plants will be using PAM as flocculant in next few years, so the demand for PAM in this sector will increase constantly.
In papermaking, PAM is used mainly as a retention aid, dryness fortifier and water treatment flocculant. The demand for papermaking additives in China is extremely brisk. Around 8% of China’s PAM consumption in 2015 was in the papermaking sector.
In addition, PAM is used in mining, metallurgy, coal, and in making superabsorbent polymers, adhesives and leather tanning agents. Figure 2 shows China’s PAM consumption pattern in 2015.

Foreign trade

China imported 13.6 kt of PAM in 2015 and exported 65 kt. The principal exporting province was Shandong, accounting for 41.7% of the total export volume. Jiangsu and Anhui came next, accounting respectively for 20.8% and 15.5%. The major export destination was India, taking 33.1% of the total export volume. Canada and Australia came next, taking 10.1% and 5.1%, respectively. The major export customs office was Qingdao Customs, handling 45.7% of the total export volume. Shanghai Customs and Nanjing Customs came next, handling 19.4% and 12.4%, respectively. Table 3 shows China’s import and export of PAM in recent years.

Table 2    Consumption of PAM in China, 2013-2015  (kt)

Year    Output    Import volume    Export volume    Apparent consumption    Self-sufficiency
(%)
2015    850    13.6    65    799    106.4
2014    830     14     92    752    110.4
2013    772     18     85    704    109.7


Table 3    China’s foreign trade in PAM, 2013-2015

Year    Import    Export
    Volume (kt)    Value (US$ million)    Volume (kt)    Value (US$ million)
2013    18.0    28.74    85    325.73
2014    14.2    42.97    92    215.62
2015    13.6    36.93    65    136.35


Market price

Due to the differences in prices of anionic PAM, cationic PAM and nonionic PAM, the difference in properties between domestic products and imported products and the variations in molecular weight and ion intensity, the prices of PAM varieties differ widely. Numerous varieties and brands of PAM are produced. Prices have been quite stable in recent years. The prices of anionic PAM are RMB12 000-14 000/t. The prices of cationic PAM are RMB22 000-23 000/t. Usually, higher molecular weight brings a higher price. Cationic PAM usually sells at a higher price than anionic PAM.
Anionic PAM produced in China has already fully replaced imports in tertiary oil extraction, and the profit rate has gradually declined to a rational level and stabilized. Owing to its high technical requirements, high-end anionic PAM made especially for oil extraction is in short supply and has a high market price and a high gross profit rate.
Cationic PAM is in short supply in China, demand is satisfied mostly by import, and the product has a high profit rate. With the growing emphasis on environmental protection, particularly in response to national policy changes of 2006, PAM demand has increased rapidly, and the profit margin remains relatively high today.