Photovoltaic Will Keep Pushing Up EVA
Click:0    DateTime:Aug.11,2022

Jin Dexia, JLC

In 2021, the opening year of "14th Five-Year Plan" period, ethylene - ethylene vinyl acetate copolymer (EVA) capacity expansion speeded up, promoting the innovation of EVA production technologies as well as the diversity of its upstream products. At the same time, new producers’ locations, new product and new sales modes have driven the EVA supply pattern to change. Affected by domestic capacity expansion, imports decreased among fiercer competition. As for downstream sectors, photovoltaic power generation has entered a new stage of development. As EVA’s biggest consumer, photovoltaic demand surge means EVA demand surge, leading on the industry players expectation on EVA’s bright future.

EVA capacity expands and its feedstock sources diversify

There are 10 EVA manufacturers in China, with a total capacity of 1.922 million t/a. There are obvious differences among these producers in terms of raw material resources, the nature of the enterprises, capacity scales and locations. 

There are three different production routes regarding the ethylene resources: naphtha to olefin, methanol to olefin and coal to olefin. Yanshan PC, Beijing Organic, Formosa Ningbo, BASF-YPC, YPC, Sinochem Quannzhou, Zhejiang PC and Zhongke (Guangdong) Refinery & Petrochemical all adopt the traditional naphtha to olefin route. Levima Advanced Materials and Jiangsu Sierbang use methanol to olefin process. While Yanchang Yulin Energy & Chemical, with its LDPE/EVA line launched in 2021, favors coal to olefin route. Naphtha is still the most important feedstock. Beijing Organic and Formosa Ningbo purchase ethylene while the others have their own upstream resources. As for vinyl acetate resources, all producers buy from the market except for Beijing Organic, who produces vinyl acetate itself. 

Yanshan PC and Beijing Organic belong to Sinopec, BASF-YPC is a joint venture, Levima Advanced Materials, Sinochem Quanzhou, Yulin Energy & Chemical and Jiangsu Sierbang are all regional enterprises, while Formosa Ningbo is a wholly foreign owned company. As for the sales modes, Yanshan PC, BASF-YPC and YPC have Sinoe to sell their products while others are selling EVA output themselves. 

Yanchang Yulin Energy & Chemical’s new line can switch between LDPE and EVA, and its unit line capacity is the biggest in China. However, Zhejiang PC, with capacity at 300 000 t/a, is China’s first producer that is able to produce photovoltaic purposed EVA. While Jiangsu Sierbang’s 300 000 t/a EVA/LDPE unit had never manufactured any LDPE since 2018. As it has been making EVA, its sales were large, and products were diversified. 

The distribution of EVA producers was stable before 2021, all concentrated in East China and North China. However, new capacities in 2022 appeared in East China, Northwest China and South China. 

Output in 1H of 2022 might double 1H of 2021

China saw many EVA capacities come on stream in 2021, and the outputs therefore started to increase.

Chart 1 shows China’s EVA production in 2021 and 2022. According to statistics, China’s EVA output totaled 1 million tons in 2021, up 36.71% over 2019 and 35.99% over 2020. The production in second half of 2021 increased by 48% over that of the first half of the year, mainly due to the launching of Yanchang Yulin Energy & Chemical’s 300 000 t/a, Sinochem Quanzhou’s 100 000 t/a and YPC’s 100 000 t/a, as well as the resumption of Yanshan PC’s old 60 000 t/a LDPE/EVA line. Zhejiang PC started its 300 000 t/a unit at the end of the year, no contribution to the output of course. 

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Chart 1 China’s EVA output, 2021—2022

Zhongke Refinery & Petrochemical’s 100 000 t/a plant came on stream in the first quarter of 2022, and its production increased largely accordingly. The production in the first half of 2022 might double the figure of the first half of 2021. 

EVA import volume decreases

China imported 1.117 million tons EVA in 2021, 21 thousand tons more than 2019 but 60 thousand tons less than 2020, as shown in Chart 2. Such decrease was a result of the domestic capacity expansion. Chinese market had 800 000 t/a new EVA capacities come into in the second half of the year 2021, leading to a pessimistic market forecast and less imports. 

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Chart 2 China’s EVA imports, 2021-2022

Along with the capacity expansion, China’s supply of foaming materials, wires & cables, and photovoltaic materials has been increasing. Yanshan PC’s coating materials production contributed a lot to China’s coating industry and forced the import volume to fall. However, the hot-melting adhesive output is still small and hence the import dependency of this sector is high. Overall, EVA industry has a bright future and with the continuous expansion of capacity, the imports will keep decreasing. 

Photovoltaic industry drives EVA demand

China’s EVA apparent consumption in 2021 was about 2.053 million tons, up 10.12% over 2020, shown in Chart 3. Traditional downstream sectors like foaming materials and wire & cable are slow in growth, and photovoltaic is still the biggest driven factor of EVA. 

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Chart 3 China’s EVA apparent consumptions, 2021-2022

Three biggest consumers of EVA in China are photovoltaic, foaming and wire & cable. In 2021, photovoltaic took 40% of all the consumption, an increase of 18% from 2020; foaming 27% and wire & cable 17%, flat with 2020. 

The quick development of photovoltaic industry means the necessity of imports. Driven by this, EVA capacity has expanded from 500 000 t/a in 2014 to 1.922 million t/a now, with the growth at 244.4%. Photovoltaic industry will keep driving EVA in the future. 

In 2021, the traditional foaming and wire & cable industries were slow in development. However, “double carbon” targets brought new opportunities to photovoltaic industry. The year 2021 was also the first year of flat prices. The upsurging prices of the whole photovoltaic industry chain (including upstream silicon and EVA) and the increases in freight and commodities both have brought challenges to the industry. 

In 2021, China’s additional photovoltaic installed capacity was 54.88 million kilowatts, a historical high ever since and ranking No.1 worldwide for ninth consecutive year. Among the expansion, distributed photovoltaic installed exceeded 50% for the first time, becoming the biggest highlight of the year.

Photovoltaic will still be the most important driven factor of EVA industry

The 14th Five-Year Plan period is a key period for the realization of double carbon targets. The authorities and all industry players shall firm their confidence in development, improve the development policy, continue to promote the photovoltaic industry to develop with a larger scale, higher proportion and higher quality, so as to achieve the "double carbon" target as scheduled and successfully complete the "14th Five-Year Plan" goal.

     Facing the “double carbon” targets, photovoltaic industry’s authority, the Department of New and Renewable Energy of the National Energy Administration is promoting the healthy and orderly development of photovoltaic and new energy industries through a series of work. China's photovoltaic industry will usher in a new era of development, thereby driving the sustainable development of the EVA industry.