Pivaloyl Chloride: Slow Demand Growth
Click:0    DateTime:Jan.26,2022

Su Zhaotong, CNCIC Consulting

Pivaloyl chloride is mostly used in organic compounds like pesticide and pharmaceuticals in China. In the pesticide sector, pivaloyl chloride acts as an intermediate in the production of insecticide azoxystrobin and herbicide isoxaflutole. In the pharmaceutical field, pivaloyl chloride is used in the synthesis of (hydroxy) benzylpenicillin, cef (hydroxy)ampicillin and cefazolin antibiotics. In the organic polymer industry, pivaloyl chloride is a key raw material of the initiator tert-butyl pivalate peroxide (TBPV).

China’s supply-demand situation

1. Producers 

There were 10 major manufacturers in 2020 (see Table 1), and six of them were located in Shandong Province, occupying 64% of the total capacities, and three in Hebei Province, taking 35% of the national total capacities. Big manufacturers include Shandong Jinde Biotechnology Co., Ltd., Shandong Minji New Material Technology Co., Ltd., Shandong Qili Chemical Co., Ltd., Hebei Guochen Chemical Co., Ltd. and Hebei Fude Chemical Technology Co., Ltd. The total capacities of the top three took 53% of the total, which is relatively high.

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2. Consumption

The consumption of pivaloyl chloride in 2020 was about 31 000 tons, with pesticides and pharmaceuticals as the major consumers. The demand from polymerization initiators and acylating agents was small. China’s consumption structure of pivaloyl chloride in 2020 is shown in Chart 1.


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Chart 1 China’s pivaloyl chloride consumption structure in 2020

(1) Pesticides 

China’s pesticides industry development has slackened down due to environment protection policies and the State’s industry policies. The demand for pivaloyl chloride reduced accordingly. The consumption of pivaloyl chloride by pesticides in 2020 was 17 000 tons, taking 54% of the total consumption. 

(2) Pharmaceuticals

China’s pharmaceuticals market has been growing steadily, so has the sales scale of chemical synthetic drugs. However, the growth of the synthetic drugs has slowed down, with the number of enterprises decreasing, and the concentration increasing. The pivaloyl chloride consumed by the pharmaceutical industry was about 13 000 tons in 2020, accounting for 43% of the total consumption.

(3) Others 

The consumption of pivaloyl chloride in other sectors (initiators & acylating agents of plastics) in 2020 was 1 000 tons, about 3% of the national total.

Forecast

1. Supply 

By August 2021, there were two pivaloyl chloride projects in planning, with capacity at 3 000 t/a, increasing China’s total capacity to 60 000 t/a in three years given they are commissioned as planned. Please see Table 2 for China’s pivaloyl chloride projects in planning and under construction. 

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2. Demand 

It is estimated that the pivaloyl chloride demand in China will expand stably in the following three years, up from 2020’s 31 000 tons to 2023’s 34 000 tons, with a growth of 3.6%.

The biggest buyers are pesticides and pharmaceuticals. The pesticides industry adjustment has come to an end and the pesticides production is picking up, hence pushing up the demand for pivaloyl chloride slowly. The growth of consumption will be kept at 2.8% in the next three years, reaching 18 000 tons in 2023. 

The synthetic drugs market is experiencing a change towards natural raw materials and green synthesis, expecting a rapid development. The demand growth for pivaloyl chloride is expected to remain at 4.5% in the three years, reaching 15 000 tons by 2023. 

The consumption shares of other derivative chemicals are quite small. Although the market potential in the field of initiators and acylating agents is huge, and the application and demand are both expanding, consumption is still not likely to exceed 1 000 tons in 2023.

The pivaloyl chloride consumption structure in 2023 is shown in Chart 2.

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Chart 2 China’s pivaloyl chloride consumption structure forecast in 2023

Conclusion 

In summary, pivaloyl chloride products are mainly used in pesticide and pharmaceutical fields, and the market size is 30 000 to 40 000 tons. The consumption growth in future years will not exceed 4%. There are 10 major manufacturers, mostly situated in Shandong Province and Hebei Province. The overall industry operating rate is not high. Given the new projects and low technology level, the competition on the supply side is fierce. Newcomers should be cautious, paying attention to the industry operation and waiting for opportunities.