Carbon Peaking & Carbon Neutrality Push EVA Market up
Click:0    DateTime:Jun.20,2022

Zhang Na, Shanghai Jupu New Materials Technology Co., Ltd

China announced its carbon peaking and carbon neutrality goals in September 2020, ushering in unprecedented opportunities for new energy industry. The market of photovoltaic industry is expected to grow by ten times in the next ten years, and how to use and improve the efficiency of energy storage and transmission of photovoltaic power generation becomes one of the challenges faced by photovoltaic power generation. The cost of photovoltaic electricity has fallen by 85% to RMB0.37/degree. Meanwhile, the grid connection of wind power and photovoltaic power and large projects promote the demand for photovoltaic grade EVA to climb, attracting leading companies to enter the industry.

Photovoltaic installed capacity will increase by 20% to 30% 

Driven by policy and economic factors, China’s new photovoltaic installation in 2022 will probably reach 75-90GW. Preliminary forecast has that the installed household photovoltaic capacity in 2022 may reach 30-35GW, with at least 80% system development mode.

National Energy Administration’s latest data shows that China's new photovoltaic installation in 2021 was 54.88 million kilowatts, with distributed photovoltaic installation at 29.279 million kilowatts, and centralized photovoltaic at 25.607 million kilowatts. The former exceeded the latter for the first time. Among the distributed installation, household photovoltaic reached 21.59 million kilowatts, fully demonstrating the market’s explosive growth.

Photovoltaic EVA resin demand will expand largely

China Photovoltaic Industry Association’s statistics show that in 2021, transparent EVA adhesive film was the main encapsulation material for photovoltaic modules, accounting for 52% of the market shares. White EVA film was used at the lower layer of the cell, taking 23% of the market shares. POE film’s market percentage increased due to its good performance anti-PID. In 2021, POE adhesive film and co-extruded polyolefin POE adhesive film accounted for 23.1% of the market altogether.

As leading photovoltaic adhesive film producers are all located in China, China’s PV based EVA demand is expected to reach 1.08 million tons in 2023 and 2 million tons in 2025. 

Leading companies are entering the market

Vinyl acetate (VA) of different content can be made into different products. Photovoltaic grade EVA is a high-end product with high VA content and high melt index (MI). At present, 70% of China's PV grade EVA demand is satisfied by imports.

Photovoltaic adhesive film has become the biggest derivative of EVA, and the major domestic producers are Sierbang Petrochemical, Lianhong New Materials, and Ningbo Formosa Plastics.

Domestic EVA products are mainly low-end foamed ones, and high-end products like photovoltaic adhesive film, wire and cable protective cover, hot melt adhesive and coatings are mainly dependent on imports. In 2020, China’s EVA capacity was 972 000 t/a, production 741 000 tons, imports 1 176 800 tons, exports 53 000 tons, and apparent consumption 1 874 000 tons. The import dependency was 63%, and the market size exceeded RMB20 billion. In 2021, EVA imports totaled 1 116 700 tons, production 810 000 tons, and apparent consumption 1 920 000 tons. China's EVA demand growth has been maintained at a rate of 10%.

EVA market prices have been in the band of RMB10 000 – 15 000/ton. However, driven by the "photovoltaic fever", the market prices in the second half of 2021 hiked to RMB30 000/ton, and then remained at RMB25 000/ton in Q1 of 2022. 

The supply of granular EVA is tight in 2022, attracting leading companies from petrochemical industry. China’s EVA capacity is shown in Table 1.

3-T1

In 2021, Yulin Energy Chemical, Sinochem Quanzhou, Yangzi Petrochemical, and Zhejiang Petrochemical all launched their EVA capacities, expanding China’s EVA capacity by 800 000 t/a. In 2022, Zhongke Refinery, Gulai Petrochemical, Tianli High&Newtech will all start their EVA plants. Meanwhile, as China’s photovoltaic EVA resin leading producers, Sierbang Petrochemical and Lianhong New Materials both have investment plans to expand their EVA.

     The production technology of photovoltaic EVA resin is high, and the capacity expansion period takes 4-5 years, including 2.5-3 years’ construction and 1-2 years’ VA content increase. Such a long period brings uncertainty to the industry. In addition, the production of photovoltaic grade EVA material means reaching high VA content and high MI and breaking through high operational difficulties.