By Lei Lijing, Liu Junkai, Jilin Design Institute of CNPC Northeast Refining and Chemical Engineering Co., Ltd.

In China, methyl methacrylate (MMA) production has been industrialized mainly by employing the acetone cyanohydrin (ACH) method, providing 84% of the nation’s MMA production capacity. But because the raw material hydrocyanic acid in the ACH method is restricted by some factors, such as acrylonitrile plant operation and environmental protection, the operating rate of such units is lower, MMA production overall is limited, and MMA prices have continued to rise in recent years.
   With a domestic technology breakthrough in C4 method in the "13th Five-Year Plan" period (2016-2020), China MMA industry will enter a period of rapid development, and the tight supply will be gradually relieved. Then enterprises may have to bid farewell to today’s high profits.

Consumption

   In 2011, domestic MMA capacity was 555 kt/a, and output was about 530 kt. By the end of 2016, domestic MMA capacity was 823 kt/a, output was 520 kt, and the average operating rate of the equipment was 63.2%. Under the constraints of many factors such as demand, raw materials and environmental protection, the domestic MMA operating rate has not been high. Eight MMA producers in China are mainly concentrated in East and Northeast China, including capacity of 458 kt/a in East China, accounting for 55.7% of the country’s capacity, and capacity of 275 kt/a in Northeast China, accounting for 33.4%. Two companies (Evonik Degussa China Co., Ltd. and Huizhou MMA Co., Ltd.) already use the C4 method, while the ACH method is used by all other enterprises. The status of MMA production enterprises in China in 2016 is shown in Table 1.

Table 1   MMA production enterprises in China, 2016

   According to designs and proposals, the total capacity of plants being built (now in an early stage) is 640 kt/a. By 2020, domestic MMA capacity will reach 1 183 kt/a. New / expansion MMA projects in China are shown in Table 2.

Table 2   New / expansion MMA projects in China

   In 2011, the domestic apparent consumption of MMA was 432 kt, and it increased to 647 kt in 2016. Average annual consumption growth was 8.4% between 2011 and 2016. Domestic supply and demand of MMA between 2010 and 2016 is shown in Table 3.

Table 3   Domestic supply & demand for MMA, 2010-2016 (kt)

Foreign trade

   In 2011, China imported 140 kt of MMA, increasing to 275 kt in 2014. In August 2015, China's Ministry of Commerce imposed anti-dumping measures on MMA originating in Singapore, Thailand or Japan. The import volume decreased significantly, dropping to 158 kt for 2016. China exported 69 kt of MMA in 2011 and 31 kt in 2016. Import sources and export destinations of MMA of 2016 are shown in Table 4.

Table 4   China’s MMA foreign trade, 2016 (kt)

Key trends for future development: serialization, diversification & specialization

   In 2016, 64% of domestically consumed MMA was used for making plexiglass (PMMA). Other major uses were making plastic processing additives ACR and MBS (16.1%) and surface coatings (14%).

   PMMA molded plastic & plates

   In recent years, with the rapid development of information industry, liquid crystal displays (LCD) have been widely used in computers and flat-panel televisions instead of traditional cathode ray tube (CRT) displays, making LCD consumption grow continually. In addition, rapid growth of demand for billboard supplies, auto parts and artificial marble has led to a steady increase in MMA consumption. At present, PMMA consumption in China is mainly in middle and low end manufacture of such products as advertising lamp boxes, signs, lamps, bathtubs, instruments, daily necessities and furniture. Special PMMA products – such as optical grade PMMA casting board, anti-ray PMMA board, antistatic plates, wear-resistant PMMA board and flame retardant PMMA board – are mostly imported, because domestic PMMA technology is relatively backward. These series of products sell in large quantities here, potential demand is growing rapidly and profit margins are large. But in the short term, it is difficult to improve upon the surplus of domestic low-end products and the shortage of domestic high-end products. In addition to losing market share to cheap polystyrene and polycarbonate, the growth of PMMA demand will slow down in the future.
   Since the second half of 2016, the price of domestic MMA has been rising. The profit margins of downstream PMMA enterprises have been seriously squeezed. Many board makers choose recycled MMA to reduce costs. Due to the pressure from environmental inspectors and the policy restrictions imposed by the state on the import of waste plastics in 2017, in the future, enterprises that crack waste to produce PMMA will gradually shut down, which will release a certain demand space. PMMA makers will still be the main consumers of MMA in China in the future.

   Additives ACR and MBS for modification of PVC plastics

   ACR is mainly composed of MMA and a small amount of acrylate and styrene polymerization. Different types of ACR can improve the behavior of PVC during processing and its impact resistance; MBS is the terpolymer of MMA, butadiene and styrene. It greatly improves the rigidity, toughness, dimensional stability, processing fluidity and tonal effect of PVC products; it is especially widely used in the production of transparent PVC products. In 2016, domestic MMA consumption in making modification additives for impact resistant products was 120 kt, or 16.1% of the total.
   With the continuous improvement of the standard of living and the requirements to save energy and protect the environment, accelerated use of plastics instead of wood and steel will stimulate rapid development of PVC products. Meanwhile, the proportion of hard products continues to increase, driving the demand for plastic modification additives.

   Surface coatings

   In the field of surface coatings, MMA is used mainly to produce solvent based coatings, water-based coatings and latex paints, which are widely used in the automotive, furniture-making and construction industries. Foreign MMA has a large market share in the surface coating industry; consumption of MMA in this field is less in China now than in the past. With the establishment of sole-proprietorship and joint-venture coating enterprises by such multinationals as Japanese Nippon, British ICI, German BASF, DuPont, AKZO NOBEL, domestic demand for MMA in making high-end coatings and new-formulation coatings has greatly increased. In 2016, domestic MMA consumption in the field of surface coatings and adhesives was about 105 kt, or 14% of the total. In the future, with the rapid development of the domestic construction and automobile industries, the proportion and output of top grade coatings in China, especially high-grade waterborne coatings will increase greatly, and demand for MMA will increase correspondingly.
  

   Domestic MMA demand will likely reach 915 kt in 2020, growing 5.3% annually between 2016 and 2020.
   As already mentioned, domestic MMA products can be used only in the middle- and low-quality consumption areas, and the high-end sector still relies on imports. So we should make great efforts to develop MMA products with high value-added and high technology content, so as to make the products serialized, diversified and specialized.