By Xie Yong, Duan Chong and Xie Hongliang, Epoxy Resin and Application Committee of CPCIF
China’s epoxy resin industry made progresses in supply side reform, industrial structure, cleaner production, industrial investment, etc. from 2016 to 2020. However, structural contradictions remained obvious, i.e. surplus of low-end products and shortage of high-end goods like high-grade composite materials used in large aircrafts, high-grade epoxy materials used in roads and bridges, etc. To propel development of the epoxy resin industry, the Epoxy Resin and Application Committee of the China Petroleum and Chemical Industry Federation (CPCIF) organized related parties to compile Opinions Related to Development Plan for China’s Epoxy Resin Industry (2021-2025).
Main achievements and problems during 2016-2020
1. Main achievements
1) Expanding scale and improving industrial system
Some small and medium-sized enterprises withdrew from the market, decreasing domestic epoxy resin capacity, which later rebounded given that some large firms expanded their capacity moderately. Output rose 9.6% annually, and consumption 10.7%, both surpassing GDP growth. In 2020, China’s capacity of epoxy resin was up 6.6% YoY to 2.22 million t/a, output up 14.7% YoY to 1.7 million tons, consumption up 19.6% YoY to 2.05 million tons and operating rate up 5.4 percentage points YoY to 76.5%.
With the coronavirus basically under control, domestic demand for epoxy resin rebounded quickly in areas such as new energy, new infrastructures and electronics. Coatings firms consumed 831 000 tons of epoxy resin in 2020, up 12.9% YoY; electrical and electronic firms, 656 000 tons, up 26.4% YoY; composite material firms, 425 000 tons, up 24.6% YoY; adhesive firms, 142 000 tons, up 14.2% YoY.
Capacity and output of upstream bisphenol A (BPA) increased. Production of non BPA epoxy resin expanded. Foreign products could no longer monopolize the market in some high-end areas like polyether amine, anacardol and special phenolic resin. Epoxy-based materials were increasingly used in the fields of wind power, automobile, industrial anti-corrosion and marine coatings. See Table 1 for supply and demand of epoxy resin in China during 2016-2020.
2) Progresses in supply side reform and cleaner production
Most epoxy resin enterprises relocated to chemical parks from 2016 to 2020, propelling cleaner production and increasing concentration ratio. The number of epoxy resin firms was down from more than 100 in 2015 to over 50 in 2020, and outdated production units were basically phased out, lowering total capacity from 2.5 million t/a to 2.22 million t/a. At present, China has eight epoxy resin firms, each boasting a capacity of more than 100 000 t/a, and their combined capacity reaches 1.4 million t/a, accounting for over 60% of the nation’s total. Mainstream projects are related to integration of BPA, epoxy chloropropane and epoxy resin units.
3) Improving industrial structure and rapid development of high-end products
In the last five-year plan period (2016-2020), domestic demand for epoxy resin – environment friendly or used in the areas of new energy and 5G communication – grew rapidly, spurring development of high-performance, special epoxy resin products, which were tried to be used in pitch, bridge anti-corrosion, wind-power blades and hydrogen storage. Water-borne epoxy resin got more exposure, especially in the automobile, container, building waterproof and road maintenance industries. In addition, coatings companies increasingly adopted solvent-free epoxy resin with high solid content.
In 2020, domestic epoxy resin firms consumed 514 000 tons of curing agents, featuring rich varieties and high added value. More specifically, 380 000 tons were amine-type curing agents, 100 000 tons anhydride-type, and 34 000 tons other types. Industry players have made technical breakthroughs in some of curing agents such as polyether amine, IPDA, DDM, etc. China’s capacity of epoxy resin diluents was around 110 000 t/a in 2020, when output reached 70 000 tons. Some products saw rapid growth in output, including novolac epoxy, polyether amine, anacardol diluents, etc.
2. Main problems
1) BPA-type epoxy resin took up 80.1% of the nation’s total epoxy resin output, and 79.4% of consumption; special epoxy resin, 4.8% and 8.8%, respectively. More than 50% of domestic demand for special epoxy resin was satisfied by imports. As for curing agents used in epoxy resin, the percentage was even higher, exceeding 80%. The shortage of these key products brought supply risks to high-end areas, aerospace, bridge anti-corrosion and high-speed rail in particular, and curbed development of these industries.
2) Most domestic epoxy resin enterprises faced difficulties like weak R&D and innovation capabilities; limited experiences in high-end application development, product design and special additives; no related national research institutes or technological innovation platforms.
3) Given limited communication channels, epoxy resin companies could hardly ask for help from the government, which in turn would be difficult to play its guiding role. Further, EIA and safety assessment procedures were too complicated, and therefore enterprises had no enthusiasm to develop new technologies.
Development of the epoxy resin industry during 2021-2025
The epoxy resin industry will improve innovation ability, propel green development, improve technical content and added value of products, and develop high-end products. Domestic capacity of epoxy resin is forecast to reach 3.5 million t/a, and output 2.5 million tons, both in 2025, when the number of companies with capacity exceeding 100 000 t/a will be around 12. Further, industry players try to increase capacity proportion of non BPA special epoxy resin to more than 30%, and lower energy consumption per unit of epoxy resin by over 20%. More progresses will be made in cleaner production. For BPA epoxy resin (EP01441 310), consumption of epoxy chloropropane will be no higher than 0.544T/T, and BPA consumption no higher than 0.681T/T. For liquid BPA epoxy resin, solvent consumption will not be above 0.005T/T, and energy consumption per unit of products not be above 190kgce/t. The epoxy resin industry will focus on:
1. High-end products that are in short supply
* Epoxy resin used in large aircrafts
*Anti-corrosion, high-extension and high-adhesion epoxy resin used in roads, bridges, marine equipment, airport construction, etc.
* Epoxy resin used in 5G, 6G communication, electronic chips, photoresist, copper-clad plate, etc.
* Low-loss, high-weatherability epoxy resin used in EHV, power transmission and transformation, nuclear power, etc.
* High-modulus, high-tenacity epoxy resin used in rubber tires for automobiles and airplanes
* High-performance, waterborne epoxy resin used in urban reconstruction
2. Basic raw materials of special epoxy resin, such as phenols, alcohols, ethers, diethylenetriamine, triethylenetetramine, special aromatic amine, aliphatic amine, etc.
3. Environment friendly epoxy resin used in coatings, adhesives, 3D printing, photoresist, etc.
4. High-performance, functional epoxy resin – featuring high purity, low viscosity, low total chlorine, halogen free, no residual solvent, UV/nuclear radiation resistance, high temperature resistance, high anti-corrosion, high strength, light weight, etc. or with functional performance (e.g. self-cleaning, self-repair, sensing, energy storage, etc.)
In the next five years, epoxy resin enterprises are encouraged to develop products with low energy consumption, low pollution, or independent intellectual property rights. In detail, they mainly include: 1) high-solid, high-stability, high-applicability waterborne epoxy resin and curing agents; 2) high-purity, high-performance, low total chlorine, low residual solvent epoxy resin; 3) halogen-free, flame-retardant, low-cost epoxy resin; 4) alicyclic epoxy resin with different molecular structures; 5) polyimide modified high temperature resistant epoxy resin; 6) organic silicon, fluorine materials modified epoxy resin featuring high temperature resistance, high elasticity, etc.; 7) phenolic aldehyde and modified epoxy resin; 8) biodegradable and light-cured monomer modified epoxy resin; 9) functional polyether amine, alicyclic amine special curing agents; 10) high-purity and functional epoxy curing agents and accelerators.
Some epoxy resin units will be restricted – e.g. units failing to meet environment protection requirements and discharge standards, boasting capacity of lower than 20 000 t/a BPA liquid epoxy resin or having risks to the environment or operating personnel.
Units without high salt wastewater disposal systems and failing to meet discharge standards – and units with capacity of less than 20 000 t/a BPA liquid epoxy resin and not in line with discharge rules – will all be phased out. Further, epoxy resin not keeping with standards related to raw material consumption will withdraw from the market.
