Chen Huimin, Guo Lingyan from CNCIC
Starting in mid-to-late 1990s, China’s special engineering plastics industry is in its early stage of development and has a huge gap with leading overseas counterparts.
PI: Electronic grade will boost growth
China’s PI film industry started late. At present, there are around 70 producers in China, with capacity mostly at 100 tons and products applied mainly in the low-end market. Rising demand for high-end electronic grade PI film has motivated some domestic producers to enter the high performance material market. Zhuzhou Times New Material Technology, Danbond Technology, RAYITEK Hi-Tech Film Company in mainland China and Taimide Technology, Mortech Corporation in Taiwan have formed the above-scale production capacity of electronic grade PI film. China’s PI film capacity totalled 16 kt/a in 2019, with the average operating rate at around 60%, while high-end electronic-grade PI film capacity was below 1 kt.
On the demand side, the compound growth rate of domestic PI film demand during 2016-2020 was as high as 10% and the total demand in 2020 reached around 13 kt. China’s current demand for electronic grade PI film is almost the same with that for electrician grade, and the former will pick up further to exceed the latter in 2023, as applications including electronic display, flexible printed circuit (FPC) and thermal graphite film etc. are growing rapidly. High-end electronic grade PI film is facing with big technical barriers, such as equipment, process and talent and its development has entered a bottleneck period. China’s import dependency rate of PI film was 25% in 2020. The accumulation of related research and development, technical talents as well as the shift of key downstream markets to mainland China and supportive policies will accelerate the PI film development. Hence, China will gradually realise the substitute of domestically-made high-end products for imports.
PPA: Import reliance rate at around 70%
The industrialization of China’s semi aromatic PPA began late, with a limited number of PPA producers. Statistics show that domestic PPA resins capacity totals around 16 kt/a and major producers include Kingfa SCI. & TECH Co., Ltd., Jiangmen Dezhongtai Engineering Plastic Technology Co., Ltd, Qingdao Sanli and Zhejiang NHU Co., Ltd. Kingfa SCI. & TECH Co., Ltd is the largest PPA resin producer in China and PA10T is its main product.
On the demand side, domestic PPA demand reached 33 kt in 2020, with the demand growth rate exceeding 10% in 2016-2020. However, China still has a high import reliance rate of PPA at over 70% as domestic products lack competitive edge. At present, domestic PPA consumption concentrates in electronics, auto, consumer goods, aerospace and military etc. Of these, electronics and autos are major consumers and they together account for above 85% of domestic PPA consumption. China’s PPA demand will retain over 8% growth in the coming five years, boosting domestic PPA demand to 50 kt by 2025. The rapid development of the electronics industry is the major growth driver of PP demand.
LCP annual consumption at 30 kt
Global LCP capacity stands at around 78 kt/a, of which, Chinese producers only take up around 20%. Despite a relatively late start, China’s LCP capacity has been increasing at a fast pace and climbed to 18 kt/a by 2020, with a number of projects coming on stream in recent years. Major producers include Shenzhen WOTE Advanced Materials Co., Ltd., Kingfa SCI. & TECH Co., Ltd., Shanghai PRET Composites Co., Ltd., and Ningbo JUJIA New Material Technology Co., Ltd. Shenzhen WOTE is the largest LCP producer in China, having 8 kt/a of capacity, accounting for around 45% of the domestic total.
As for demand, domestic LCP demand was around 30 kt in 2020 but import dependency rate stood at around 80%, given such factors as technical constraints and product quality. In terms of consumption structure, electronics and appliances are the major consuming fields of LCP and they together contribute to around 80% of LCP consumption, mainly used in the production of all kinds of connectors for electronic equipment. The growth rate of LCP consumption in 5G communication will reach above 30% in the following five years, with total consumption at 4 kt by 2025. China’s LCP consumption may sustain over 6% growth in the near term and may top 40 kt by 2025, on demand from electronics and appliances, as well as autos.
PEEK: Demand growth to be up to 15%-20%
China started to develop PEEK technology since 1980s. Jilin University is the representative R & D institution. Domestic PEEK capacities concentrate in ZYPEEK, PFLUON and Changchun Jida Engineering Research For Super Engineering Plastics Ltd., accounting for 80% of total domestic capacity. ZYPEEK hosts 1 kt/a PEEK capacity. Domestic products are inferior to imports in terms of continuous production and quality control and have a big gap with leading foreign-funded producers. China’s PEEK capacity will continue expanding in the following five years. Victrex and Yingkou Xingfu Chemical Co., Ltd. announced that they had established a joint-venture enterprises in Panjin, with designed PEEK capacity of 1.5 kt/a.
On the demand front, domestic PEEK demand posted a high growth rate of up to 20% in 2016-2020 and total demand reached around 1.45 kt in 2020. Major consumption sectors include electronics, auto, aerospace and military etc. China’s PEEK demand will sustain a 15-20% growth rate in the coming five years and rise to 3 kt by 2025.
Special engineering plastics industry in early development phase
China has initially realised industrialization of PI, PPA, LCP and PEEK, etc, but the overall special engineering plastics industry is still in the early development period due to the relatively late start of research and its big gap with overseas advanced levels. Domestic products still have problems such as poor batch stability because of the weak accumulation of original technology and core products rely heavily on imports. On the other hand, lagged domestic downstream demand, especially the high-end applications, which lagged behind overseas developed countries for more than 10 years has been hampering the upstream industry development.
China’s special engineering plastics to usher in huge development opportunities
China issued a series of favourable policies to enhance the industrialization of special engineering plastics. “New Materials Industry Development Guide” regards special engineering plastics as the focus of advanced basic materials. Industry policies including “Guidance List for the First Batch Application Demonstration of Key New Materials” and "Classification of Strategic Emerging Industries" have been encouraging the application and development of special engineering plastics.
On the demand side, global demand for special engineering plastics has been rising year by year. China’s domestic demand has reaped notable growth and has vast development potential. The development of new energy vehicles, 5G communication technology, new-type infrastructure construction, new-type urbanization construction, transportation, water conservancy and other major projects construction are poised to boost demand for high performance materials.
