Huang Gesheng, Wang Hongqiu, Shi Xiaoyu, Research Institute of PetroChina Co., Ltd.

Status quo of Chinese POM industry

The polyoxymethylene (POM) industry in China started to develop in the 1950s. The market growth needs big funds as POM is a technology intensive material chemical product, but the investments in the R&D of POM were far from enough in the early stage, so the industry saw slow technological progress. At the end of the 20th century, the technological level was low and the majority of plants was below 10 000 tons, resulting in high costs of raw materials and power and unstable quality of products. In the 21st century, a number of POM plants were rapidly built in China by the introduction of technologies and investments from advanced foreign enterprises, thereby improving the quality of domestic POM fast. 

The distribution of POM capacities in China is scattered. They are seen in Chongqing, Yunnan, Henan, Inner Mongolia, Jiangsu, Ningxia, Shandong, Shanghai, Tianjin and Hebei. There are around ten major producers, including Yuntianhua Group, Ningxia Coal Industry Group and PTM Engineering Plastics (Nantong) Co., Ltd. At the end of 2020, China's POM capacity reached 550 000 t/a and the output was 314 000 tons, but in fact, the effective capacity was 410 000 t/a because the POM units of Shanghai Blue Star and Tianjin Bohai Chemical have been idled for a long time. Table 1 shows the status quo of POM producers in China.

Chinese POM producers, including Inner Mongolia Jiutai, Xinjiang Guohua, Xinjiang Guozhong Xinxing, Xinjiang Bluestar Xinchen and Xinjiang Wangjinglong, plan to increase capacities by 460 000 t/a in total during 2021-2022. The release of new POM capacities is bound to make the market competition more furious. While laggard capacities are being driven out of the market, producers find it necessary to develop medium and high-end technology-driven products. If all the capacities under construction and to be constructed can be put into operation, the total domestic POM capacities will exceed 1 million t/a by 2025, with an average annual growth rate of 16%. If these projects are still largely committed to producing medium and low-end copolymerized POM, the domestic market will suffer more structural surplus.

China's POM production technologies are mainly introduced from Poland's ZAT, FU NGAI ENGINEERING (HONG KONG) and South Korea's P&ID. Most of the POM products are general-purpose products, which are mainly used in low-end fields such as zippers, daily consumer goods and medium and low-end electronic appliances. These products usually have the following flows: high consumption of raw materials and utilities, unstable quality of products. Yuntianhua Group adopted Poland’s ZAT technology to the first POM plant in China, and it is one of the biggest producers in China with advanced technology.

In terms of the types of POM in China, the capacity of copolymerized POM accounts for 96%, and that of homopolymerized POM takes up only 4%. The molecular chain structure symmetry of copolymerized POM is worse than that of homopolymerized POM, which causes the crystallinity, melting point and strength of copolymerized POM to be lower than those of homopolymerized POM. Therefore, copolymerized POM is generally used in medium and low-end fields such as daily consumer goods and industrial accessories, which cannot meet the needs for high value-added products. As a result, domestic segments such as automobile parts, high-end electronic products, as well as downstream processing producers rely heavily on imported goods.

Analysis of supply & demand and market outlook

The apparent consumption of POM in China was about 600 000 tons in 2020, and the distribution of consumption fields is shown in Figure 1. China's POM consumption in machinery industry, automobile industry, and water-delivery irrigation and drainage is lower than that in developed countries. With the development of automobile industry, China's POM consumption is expected to continue to grow in the future.

Figure 1 Distribution of POM consumption in China in 2020

High-end POM products are usually used in electronic and electrical appliances, automobile industry and machinery industry, which are produced by quality raw materials mostly imported from foreign producers such as Celanese, Polyplastics and DuPont. The domestic POM market is dominated by medium and low-end copolymerized POM, which can only meet the needs of medium and low-end industries, while the POM products used in high-end fields largely rely on imports, leading to an increase of the import volume of POM year by year. In 2020, China's net import of POM was about 309 000 tons, mainly from China Taiwan, South Korea, Malaysia, and Thailand. The distribution of import volume is shown in Figure 2.

Figure 2 Distribution of POM imports in China in 2020

Although local POM capacities have been surplus, the self-sufficiency rate is declining, mainly because most domestic POM products are of general-purpose, leaving the market to be structurally surplus in copolymerized POM and structurally short in homopolymerized POM. China has to import homopolymerized POM to cover local supply. Therefore, it is urgent to upgrade the structure of domestic POM market. It is expected that the consumption of POM in the fields of electronics and appliances, daily consumer goods, automobiles and machinery will increase steadily in the next few years, with an average annual growth rate of about 4%, and the consumption will reach about 690 000 tons by 2025. China's electronics, automobile and machinery industries are growing fast and it is likely that the proportion of imported POM will be bigger in the domestic POM consumer market in the future.