Dibasic Acid Dimethyl Ester: New Consumption Sectors Needed

By Cheng Lihong, Chen Liqiang, China National Chemical Economic and Technical Development Centre

Rapid growth of capacity

In 2016, China’s capacity and output of dibasic acid dimethyl ester rose to 117 kt/a and 94.6 kt, respectively. China had five major dibasic acid dimethyl ester producers, of which Shandong Yuanli Science and Technology Co., Ltd. was largest, with a capacity of 50 kt/a. Jiangsu Euiomoda Paint Co., Ltd. and Shandong Changle Yili Chemical Co., Ltd. ranked second and third, with respective capacities of 30 kt/a and 20 kt/a. In addition, Xinjiang Hexinkang Petrochemical Co., Ltd. recently completed a unit that has not yet produced product.
Dibasic acid dimethyl ester capacity expansion plans already exist in China. Xinjiang Hexinkang Petrochemical Co., Ltd. is expanding its capacity to 30 kt/a, based on its new 5 kt/a unit, which will be completed by the end of 2018. In addition, many domestic enterprises produce dimethyl succinate and dimethyl adipate monomer, but the output is relatively small. Major monomer enterprises include Hebei Huage Chemical Group, Beijing Jiale Chemical Co., Ltd., Langfang Langqi Chemical Co., Ltd., Weifang Bincheng Chemical Co., Ltd. and Heze Yongzhen Chemical Co., Ltd. The total output of monomers was around 13.6 kt in 2016. The monomer enterprises have no expansion plans at this time.
China’s export volume of dibasic acid dimethyl ester accounts for 30%-40% of its output. In 2016, China exported 42.4 kt. With constant capacity expansion of domestic dibasic acid dimethyl ester capacity, it is expected that export will increase.

Consumption pattern remains stable

Dibasic acid dimethyl ester is used mainly in sectors such as coatings (mainly coil material coatings and automotive coatings), casting and cleaning. With the development of applications, apparent consumption has climbed constantly in recent years. It was 30.8 kt in 2012 and climbed to 65.8 kt in 2016 with an average annual growth of 20.9% during 2012-2016. China’s consumption pattern of dibasic acid dimethyl ester in 2016 is shown in Figure 1.

1. Coatings sector

Coatings manufacture is the largest consumer of dibasic acid dimethyl ester. In coil material coatings and automotive coatings, dibasic acid dimethyl ester can be used as a diluting agent for coatings, a wide application field. In 2016, consumption of dibasic acid dimethyl ester in China’s coatings sector reached 29.3 kt.
China’s coil material coatings capacity is 500 kt/a, with average annual growth of 15%, and coil material coatings have become a focus of the coatings sector. The development of colored steel has stimulated the development of the coil material coatings market. Colored steel will still have great development space in the next few years, and it is expected that by 2020 the output of colored steel will reach 11.6 million tons with annual growth of 2.93%. The demand for coil material coatings will also increase, and it is expected that the capacity to make coil material coatings will reach around 720 kt by 2020.
With the development of China's automobile industry, the demand for automotive coatings has grown rapidly. In 2016, China’s sales of automotive OEM coatings and refinishing coatings were around 580 kt and around 250 kt, respectively. With the rapid growth of vehicle output, especially cars, the demand for automotive coatings will maintain rapid growth in the next few years.
It is expected that coil material and automotive coatings will maintain stable growth during the 13th Five-Year Plan period (2016-2020). In 2020, consumption of dibasic acid dimethyl ester in the coatings sector will climb to around 37.7 kt with an average annual growth of around 6.5%.  

2. Casting sector

Casting firms are collectively the second largest consumer of dibasic acid dimethyl ester. Consumption of dibasic acid dimethyl ester in China’s casting sector was 9.5 kt in 2012 and climbed to 20.2 kt in 2016, with average annual growth of 20.8% during 2012-2016.
Dibasic acid dimethyl ester is an important solvent needed for the production of cold-box casting resin. Cold-box casting resin is an important film-making material for sectors like automobiles, tractors and internal combustion engines. During the 12th Five-Year Plan period (2011-2015), China's output and sales volume of automobiles promoted the rapid consumption growth of cold-box casting resin. Domestic consumption of cold-box casting resin reached 60.6 kt in 2016, with average annual growth of 6.6% during 2012-2016.
In the coming five years, China’s automobile market is expected to maintain slow growth, with an average annual growth of around 3.8%, and by 2020, China’s automobile market will reach 28.76 million vehicles annually. During the 13th Five-Year Plan period (2016-2020), the consumption of cold-box casting resin will also grow slowly, and by 2020, the consumption of dibasic acid dimethyl ester in this sector will reach 25.5 kt.

3. Cleaning and other sectors

Dibasic acid dimethyl ester, which can replace dichloromethane to be used as a solvent in coatings, is highly soluble and has low volatility. In addition, dibasic acid dimethyl ester can be used to produce 1,5-pentanediol and 1,6-hexanediol, and further produce polyurethane. China’s consumption of dibasic acid dimethyl ester in cleaning and other sectors was 7.6 kt in 2012 and reached 16.3 kt in 2016 with average annual growth of 21.0% during 2012-2016.
During the 13th Five-Year Plan period (2016-2020), the polyurethane sector is expected to enter a period of deep adjustment, following its rapid growth, and the annual growth of 1,5-pentanediol and 1,6-hexanediol consumption will slow from around 10% during the 12th Five-Year Plan period (2011-2015) to around 8%.
Therefore, it is expected that during the 13th Five-Year Plan period (2016-2020), consumption of dibasic acid dimethyl ester in cleaning and in other sectors will still grow annually around 6% to reach 20.6 kt by 2020.
Overcapacity will be the main factor affecting domestic development of the dibasic acid dimethyl ester sector. It is expected that by 2020, capacity will continue to grow by 60 kt/a. China has entered an economic “new normal” wherein demand growth is expected to slow down significantly. Expansion of exports and development of new consumption sectors will be needed to solve the problem of excess capacity in this sector.