By Zhang Guihua, Ren Guoqing and Kong Qingguo

Soaring demand for PBAT

China rolled out strictest policies last year to ban or restrict production, sales and use of many plastic products, greatly propelling biodegradable plastics industry. Demand for PBAT, an important kind of biodegradable plastics, will surge in the coming two years.However, PBAT firms will face mounting competition, especially after 2022, when new capacity will shoot up. Small companies will be harder to survive at that time.

R&D and production of PBAT in China

Domestic PBAT producers mainly adopt direct esterification method, and major institutes or companies researching PBAT include Technical Institute of Physics and Chemistry of CAS (TIPC-CAS), Institute of Chemistry of CAS (ICCAS), Tsinghua University and Xinjiang Blue Ridge Tunhe Chemical Industry Joint Stock Co., Ltd. (Blue Ridge Tunhe). TIPC-CAS has developed PBAT with low costs, good mechanical property and good biosecurity, authorizing Shandong Huiying New Material Technology Co., Ltd., Jinhui Zhaolong High Technology Co., Ltd. and Shandong Yuetai New Biological Material Co., Ltd. to produce.

Run-up in new PBAT capacity

China’s existing PBAT capacity reaches around 304 000 t/a, with Blue Ridge Tunhe contributing 90 000 t/a and Kingfa Sci.&Tech. Co., Ltd. 60 000 t/a, respectively. Rising demand for degradable plastics results in expansion of PBAT capacity, which is forecast to grow over 2.5 million t/a in the future three years.

Table 1   World’s major PBS, PBSA and PBAT producers and capacity expansion (10kt/a)

Changing supply-demand structure of three kinds of raw materials

PBAT is mainly manufactured by PTA, BDO and AA – three major kinds of raw materials all with sufficient capacity. Producing one ton of PBAT requires 0.4 tons of PTA, 0.43 tons of BDO and 0.35 tons of AA. As for production costs, raw materials account for around 72%, followed by depreciation costs per unit of equipment and labor costs.

Domestic PTA capacity was up 17.3% YoY to 56.96 million t/a in 2020, and output up 10.3% YoY to 49.38 million tons. Current expansion projects will increase domestic PTA capacity by 33 million t/a, accounting for 60% of existing capacity. With these projects starting production within future three years, PTA capacity may be in excess for a certain period of time.

BDO capacity reached 2.16 million t/a in 2020, when the operating rate was only 57%. Projects ongoing or to be built boast a combined capacity of more than 1 million t/a.

China’s capacity of AA was up from 2.39 million t/a to 2.71 million t/a during 2016-2020, but the operating rate remained low, making oversupply hard to change. Soaring PBAT demand is likely to absorb excess capacity of PTA, BDO and AA.