By Cui Ming

1,4-Butanediol (BDO) is mainly used to produce tetrahydrofuran/polytetramethylene ether glycol (THF/PTMEG), gamma-butyrolactone (GBL), polybutylene terephthalate (PBT), polyurethane (PU), biodegradable plastic polybutylene succinate (PBS), vitamin B6, adipic acid, acetal and 1,3-butadiene. It has extensive applications in pharmaceutical, chemical, textile, papermaking, automobile and daily chemical sectors. Methods for the commercial production of BDO today mainly include the Reppe process, the maleic anhydride process, the butadiene process and the propylene oxide/allyl alcohol process. The Reppe process is the major method for the production of BDO. 

Evident changes of capacity distribution

   The research on BDO in China was started in the late 1960s. The development was however quite slow and the capacity was only 209 kt/a at the end of 2008. Starting from 2009 the production of BDO in China entered a period of rapid development and several new units were completed and put on stream. In 2017 a 60 kt/a unit in Shaanxi Shenmu Guorong Fine Chemical Co., Ltd. and a 200 kt/a unit in Xinjiang Guotai Xinhua Mining Co., Ltd. started production. At the time of constructing new units and expanding existing units, due to impacts from factors such as high production cost and low benefit units using the maleic anhydride process in Shanxi Sanwei Group Co., Ltd., Nanjing BlueStar New Chemical Materials Co., Ltd., Shandong Dongying Shengli Central Asia Chemical Co., Ltd., Sinopec Yizheng Chemical Fiber Co., Ltd., Zhejiang Zhongjia Huachen Energy Co., Ltd. and Zhejiang Jiangning Chemical Co., Ltd. suspended production. The 25 kt/a unit using the Reppe process in Yunnan Yunwei Group Chemical Co., Ltd. was also in a state of shutdown for long years. The effective capacity of BDO in China was 1 940 kt/a in 2017. The capacity using the Reppe process was 1 710 kt/a, accounting for 88.14% of the total. The capacity using the propylene oxide/allyl alcohol process was 230 kt/a, accounting for 11.86% of the total. 

   To pursue benefit maximization, enhance enterprise competitiveness and reduce market risk, most of existing BDO producers in China have constructed matched units of downstream derivatives, mostly being units of PTMEG and PBT. For example, Xinjiang Blue Ridge Tunhe Energy Co., Ltd. has constructed PBT and PTMEG units. China Guodian and Sinopec Ningxia Energy & Chemical Co., Ltd. has constructed a PTMEG unit. Shaanxi Shemu Guorong Fine Chemical Co., Ltd. has constructed a GBL unit.

   North China and East China were major BDO production regions in China in 2012. With the completion of new or expansion BDO units in Northwest China and the shutdown of BDO units using the maleic anhydride process in East China in recent years, the distribution of the BDO capacity has made considerable changes. Xinjiang is the biggest BDO production region in China today and the capacity was 770 kt/a in 2017, accounting for 39.69% of the total. Ningxia comes next and the capacity was 200 kt/a in 2017, accounting for 10.31% of the total. Xinjiang Meike Chemical Co., Ltd. and Xinjiang Tianye Group Co., Ltd. firmly hold the first place and the second place respectively with a capacity of 260 kt/a and 210 kt/a. These two companies do not have many downstream units and their BDO resources are mainly sold in market. The downstream PU sector has high requirements on the quality and especially the chroma of BDO. PU plants mostly purchase BDO resources from these two companies today. Table 1 shows the major BDO producers in China in 2017.

  Table 1    Major BDO producers in China in 2017

Consumption

   In China BDO is mainly used to produce THF/PTMEG, PBT, GBL and PU. With the constant development of downstream derivatives, the apparent consumption of BDO in China has kept going up in recent years. The apparent consumption of BDO was 973 kt in 2017, an increase of around 18.66% over the previous year.

   The demand of BDO in China will still make a stable increase in next few years. THF/PTMEG will remain to be the major drive for demand growth, but the demand will be stable. The demand of BDO in GBL will be quite small. The space for market growth in PU synthetic leather slurry and shoe sole materials will hold no room for optimism either. PBT will be the product with a quite rapid growth of the BDO demand. The demand of BDO in thermoplastic polyester elastomers (TPEE), hot melt adhesives and polyols will also make a constant increase. It is expected that the demand of BDO in China will reach 1 450 -1 500 kt in 2022. 

Considerable changes of market price

   With the completion of several new or expansion units and the influence from the international oil price, the market price of BDO in China has made considerable changes in recent years. The market price once again presented a rising trend in 2018. It went all way up from RMB10 480/t in November 2017 to RMB12 550/t in March 2018. The market price started to come down after April, but the reduction margin was very small. The market price was RMB11 700/t in July. It is expected that for a considerable period of time in future despite the constant increase of the demand as the capacity is already in surplus and the possibility for a drastic price rise of raw materials will not be great the market price of BDO will be maintained at the present status with no drastic fluctuations. 

Development

   Quite a few enterprises in China still plan to construct new BDO units or expand existing BDO units in next few years. Examples include the second-phase 200 kt/a unit in Inner Mongolia Dongyuan Science & Technology Co., Ltd., the second-phase 100 kt/a unit in Xinjiang Guotai Xinhua Mining Co., Ltd., the 60 kt/a unit in Shaanxi Hancheng Tiangong Metallurgical Co., Ltd., the second-phase 60 kt/a unit in Shaanxi Ronghe Chemical Group Co., Ltd., the second-phase 104 kt/a unit in Xinjiang Blue Ridge Tunhe Energy Co., Ltd. and the 100 kt/a unit in Shaanxi Yanchang Petroleum Group Co., Ltd. Most of these units will use the Reppe process and have matched units of downstream products. In case these projects can be executed according to plans, the capacity of BDO in China is expected to reach around 2 500 kt/a in 2022. The capacity growth will be mostly concentrated in regions with rich raw material resources such as Xinjiang, Ningxia and Shaanxi of Northwest China and Inner Mongolia of North China. Northwest China, Xinjiang in particular, will remain to be the major region for capacity growth. Its share in various regions will still present a rising trend and its influence on domestic supply and market price will still be on increase.

   Imported catalysts used in BDO units will be gradually shifted to domestic catalysts produced with self-developed technologies to achieve the effect of cost reduction and efficiency upgrading. As the BDO sector in China still mainly uses the Reppe process, efforts should be made to develop and improve such production technology so as to further reduce production cost and minimize environmental impact. The n-butane/maleic anhydride process will be the future development orientation in BDO production processes. As the method has a high cost pressure and BDO units using the method have all suspended production, however, the future development focus of the method is to further strengthen technical development and reduce production cost. The consumption of BDO will still mainly rely on THF/PTMEG, GBL, PU and engineering plastic PBT. New application sectors will only have limited influence on the consumption.