Bisphenol A: Intensified Market Competition amid Narrowing Demand-Supply Gap
Click:0    DateTime:Dec.26,2022

By Yanfeng

At present, the industrial production methods of bisphenol A (BPA) mainly include sulfuric acid method, hydrogen chloride method and ion exchange resin method, among which ion exchange resin method is the most important production method.

Production status

The production capacity of China's bisphenol A has grown steadily since 1992, when Bluestar Nantong Xingchen Synthetic Materials Co., Ltd. (formerly Jiangsu Wuxi Resin Factory) introduced ion exchange resin technology to build China's first bisphenol A industrial production unit. Since then, a series of bisphenol A production units have been completed and put into production, including Shanghai Covestro Polymer (China) Co., Ltd., Changchun Chemical (Jiangsu) Co., Ltd., Shandong LihuayiWeiyuan Chemical Co., Ltd., SINOPEC&SABIC Tianjin Petrochemical Co., Ltd., Zhejiang Petrochemical Co., Ltd. and Henan PingmeiShenma Polycarbonate Material Co., Ltd.

In 2021, China had 11 bisphenol A manufacturers, with a total production capacity of 2.325 million t/a, accounting for about 29.4% of the world's total production capacity. The main manufacturers of bisphenol A in China in 2021 are shown in Table 1.

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After years of development, the current production of bisphenol A industry in China presents the following characteristics;

(1) From the perspective of production capacity distribution, the production capacity of bisphenol A in China is highly concentrated, mainly in East China and North China. In 2021, the total production capacity from these two regions reached 2.155 million t/a, accounting for about 92.69% of the total production capacity. The production capacity distribution of bisphenol A in major provinces and cities in China in 2021 is shown in Figure 1.

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Figure 1 Production capacity distribution of bisphenol A in major provinces and       cities in China in 2021 

(2) From the perspective of the nature of enterprises, the production of bisphenol A in China is a coexistence of state-owned enterprises, foreign-funded enterprises, Sino-foreign joint ventures and private enterprises, among which the production capacity of foreign-funded enterprises occupies a dominant position. In 2021, there were four foreign-funded enterprises including Shanghai Covestro Polymer (China) Co., Ltd., Huizhou Zhongxin Chemical Co., Ltd., Changchun Chemical (Jiangsu) Co., Ltd. and Nan Ya Plastics (Ningbo) Co., Ltd., with a total production capacity of 1.055 million t/a, accounting for about 45.38% of the total production capacity; two state-owned enterprises including Bluestar Nantong Xingchen Synthetic Materials Co., Ltd. and Beijing Sinopec Yanshan Petrochemical Polycarbonate Co., Ltd., with a total production capacity of 300 000 t/a, accounting for about 12.90% of the total production capacity; two Sino-foreign joint ventures that both belong to Sinopec Group Corporation, including Shanghai Sinopec Mitsui Chemical Co., Ltd. and SINOPEC&SABIC Tianjin Petrochemical Co., Ltd., with a total production capacity of 360 000 t/a, accounting for about 15.48% of the total production capacity; three private enterprises including Shandong LihuayiWeiyuan Chemical Co., Ltd., Zhejiang Petrochemical Co., Ltd. and Henan PingmeiShenma Polycarbonate Material Co., Ltd., with a total production capacity of 610 000 t/a, accounting for about 26.24% of the total production capacity. Covestro Polymers (China) Co., Ltd. is the largest bisphenol A manufacturer in China, with a production capacity of 460 000 t/a in 2021, accounting for about 19.78% of the total production capacity. Followed by Changchun Chemical (Jiangsu) Co., Ltd. with a production capacity of 405 000 t/a, accounting for about 17.42% of the total production capacity.

(3) From the perspective of production technology, most production units adopt patents imported from abroad, except Bluestar Nantong Xingchen Synthetic Materials Co., Ltd. having the only domestic patented technology. Among them, Beijing Sinopec Yanshan Petrochemical Polycarbonate Co., Ltd., Huizhou Zhongxin Chemical Co., Ltd. and Henan PingmeiShenma Polycarbonate Co., Ltd. adopt the technology of Mitsubishi Chemical Corporation from Japan; Shanghai Sinopec Mitsui Chemical Co., Ltd. adopts the technology of Mitsui Corporation; SINOPEC&SABIC Tianjin Petrochemical Co. Ltd. adopts SABIC technology; Shanghai Covestro Polymer (China) Co., Ltd. adopts Bayer technology; Changchun Chemical (Jiangsu) Co., Ltd., Shandong LihuayiWeiyuan Chemical Co., Ltd. and Zhejiang Petrochemical Co., Ltd. adopt the technology of Badger Company from the United States; China Taiwan enterprise Nan Ya Plastics (Ningbo) Co., Ltd. adopts the technology of Idemitsu Kosan Company from Japan.

(4) Most of the production units are equipped with raw material of phenol acetone or downstream polycarbonate or epoxy resin units, such as Sinopec Yanshan Petrochemical Polycarbonate Co., Ltd., Shanghai Covestro Polymer (China) Co., Ltd., Shandong LihuayiWeiyuan Chemical Co., Ltd., Zhejiang Petrochemical Co., Ltd., SINOPEC&SABIC Tianjin Petrochemical Co. Ltd. and Henan PingmeiShenma Polycarbonate Co., Ltd. are equipped with polycarbonate production units; Bluestar Nantong Xingchen Synthetic Materials Co., Ltd., Huizhou Zhongxin Chemical Co., Ltd., Changchun Chemical (Jiangsu) Co., Ltd., Shandong LihuayiWeiyuan Chemical Co., Ltd. and China Taiwan Nan Ya Plastics (Ningbo) Co., Ltd., etc are equipped with epoxy resin production units; SINOPEC&SABIC Tianjin Petrochemical Co., Ltd., Sinopec Shanghai Mitsui Chemical Co., Ltd., Huizhou Zhongxin Chemical Co., Ltd. and Shandong LihuayiWeiyuan Chemical Co., Ltd. are also equipped with upstream raw material units of phenol acetone.

Import and export analysis

1. Import

According to customs statistics, the import volume of bisphenol A in China presented a development trend of first increasing year by year and then decreasing year by year from 2017 to 2021. Among them, the import volume in 2017 was a minimum of 435 700 tons, and in 2019 it surged to a maximum of 606 400 tons. The import volume in 2021 was 496 400 tons, a year-on-year decrease of about 16.53%. The import volume from January to May in 2022 was 202 100 tons, a year-on-year increase of about 0.75%. 

From 2017 to 2019, China's imports of bisphenol A mainly came from Singapore, South Korea and Thailand. Starting from 2020, China’s main import source became Singapore, South Korea and Taiwan, China. From 2017 to 2021, the main import origin countries or regions of China's bisphenol A are shown in Table 2.

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2. Export

While importing, China also exports a small amount of bisphenol A. Among them, the export volume was 4 169.49 tons in 2017, the minimum value of 1 476.06 tons was in 2018, and the export volume in 2021 was 4 593.92 tons, which was about 65.84% lower than the maximum value in 2020. The export volume from January to May in 2022 was 3 482.35 tons, a year-on-year increase of about 62.05%.

In 2021, China's bisphenol A was mainly exported to Malaysia and the United Arab Emirates, with a total export volume of 4 547.52 tons, accounting for about 98.99% of the total export volume.

Consumption status and development prospects

From 2017 to 2021, the apparent consumption of bisphenol A in China showed a continuous growth trend. The apparent consumption in 2017 was 1 611 500 tons, and increased to 2 291 800 tons in 2021. Correspondingly, the self-sufficiency rate in 2017 was 73.22% and rose to 78.54% in 2021, a year-on-year increase of about 7.75%. The supply and demand of bisphenol A in China from 2017 to 2021 is shown in Figure 2.

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Figure 2 The supply and demand of bisphenol A in China from 2017 to 2021

The main consumption of bisphenol A in China is concentrated in East China and North China, and East China is the most important consumption area. The production capacity of polycarbonate and epoxy resin in East China accounts for 75.8% and 63.6% of the total national production capacity, respectively.

Epoxy resin and polycarbonate are the two most important consumption fields of bisphenol A in China. In 2017, the consumption of epoxy resin accounted for about 53.0% of the total consumption of bisphenol A, and the consumption of polycarbonate accounted for about 40.0%. In recent years, the consumption structure has changed due to the rapid growth of polycarbonate production capacity, and the shrunk production capacity of epoxy resin amid environmental protection, product variety, industrial upgrading and multiple factors. In 2021, the proportion of epoxy resin in bisphenol A consumption dropped to 48.0%, while the proportion of polycarbonate increased to 47.0%. In addition, about 5% of bisphenol A in China is used in other fields such as tetrabromobisphenol A, polysulfone and plasticizers.

Due to environmental protection and other factors, although the epoxy resin will increase the demand for bisphenol A to a certain extent in the future in China, the driving force for bisphenol A demand will be limited, and its proportion will continue to decline. Polycarbonate will be the main driving force for the growth of bisphenol A demand in the future. Although polycarbonate is no longer listed as an encouraged item in the Guiding Catalog for Industrial Structure Adjustment (2019 Version), there are still many enterprises have plans to build or expand polycarbonate production units, such as Henan PingmeiShenma Polycarbonate Material Co., Ltd., Covestro Polymer Co., Ltd. (China) Co., Ltd., Zhejiang Petrochemical Co., Ltd., Wanhua Chemical Group Co., Ltd., Fujian ZhangzhouChimei Chemical Co., Ltd., Hainan Huasheng New Material Technology Co., Ltd., CNOOC Shell Huizhou Petrochemical Co., Ltd., Hengli Petrochemical (Dalian) New Materials Technology Co., Ltd., Heilongjiang Longjiang Chemical Co., Ltd., Liaoning YingkouJiafu Petrochemical Co., Ltd., LutianhuaZhonglan New Material Co., Ltd., Yangmei Group Qingdao Hengyuan Chemical Co., Ltd., Luxi Chemical Group Co., Ltd. and Anhui Tongling Nonferrous Metals Group Holdings Co., Ltd., which will greatly increase the demand for bisphenol A. It is estimated that by 2026, China's demand for bisphenol A will reach 2.7 million tons.

Market price

The market price of bisphenol A in China is mainly affected by the market price of raw material of phenol acetone, import price and downstream demand. From 2018 to 2021, the market price of bisphenol A (polycarbonate grade) in China presented a development trend of first decreasing and then increasing year by year. Entering 2022, the market price began to fall. In January, the market price was RMB17 100 per ton, a year-on-year increase of about 20.76%; in June, the price was RMB16 000, a year-on-year decrease of about 25.86%. It is expected that in the future, with the increasing supply of bisphenol A, stable downstream demand, falling raw material prices, and falling import prices, the market price of bisphenol A in China will inch down amid range-bound, will not be significant.

Development trend and suggestions

1. Development trend

(1) There will be excess production capacity. Due to the large gap in the current bisphenol A market in China, bisphenol A has always had good profitability in recent years, which stimulates the investment enthusiasm of enterprises. In the next few years, a number of enterprises have plan to build or expand bisphenol A production units, including Henan PingmeiShenma Polycarbonate Material Co., Ltd., Qingdao Haiwan Chemical Co., Ltd., Shandong Luxi Chemical Co., Ltd., Hainan Huasheng New Material Technology Co., Ltd., Jiangsu Ruiheng New Material Technology Co., Ltd., Nan Ya Plastics (Ningbo) Co., Ltd., HebeiCangzhouDahua Co., Ltd., Guangxi Huayi New Material Co., Ltd., Zhejiang Petrochemical Co., Ltd. and Shandong Wanhua Chemical Group Co., Ltd. It is estimated that by 2026, China's bisphenol A production capacity will exceed 3.2 million tons, while the demand at that time will only be about 2.7 million tons, thus there will be considerable excess production capacity.

(2) The rapid expansion of domestic production capacity has intensified market competition. The expansion rate of China's bisphenol A production capacity far exceeds the growth rate of demand in the downstream of polycarbonate and epoxy resin fields. It is estimated that by 2026, about 1/3 of domestic bisphenol A production capacity will not have downstream support and need to rely on external sales. In the future, the consumption of bisphenol A in China will still mainly be based on epoxy resin and polycarbonate. Between them, epoxy resin has limited support capacity for the demand of bisphenol A. Although the production capacity of polycarbonate will grow rapidly in the future, there is great uncertainty in the operating rate of the units due to the key technology being restricted by foreign countries. Once the demand in this field weakens, it will inevitably affect the development of bisphenol A industry. In the future, the proportions of epoxy resin and polycarbonate fields will show a alternate development trend. Coupled with the fact that imported products have certain advantages in quality, the competition in the domestic bisphenol A market will be very fierce.

(3) The nature of the enterprise will be changed. Since most of the planned new or expanded production units are state-owned or private enterprises, the proportion of production capacity of state-owned enterprises and private enterprises will increase significantly, while the proportion of production capacity of foreign-funded enterprises will decrease accordingly. Due to the lack of relevant technologies in China, the new or expanded units in the future will still rely on imported technologies, mainly American Badger technology and Mitsubishi technology, lacking the initiative in technology. In order to improve the economic benefits of the enterprise, the integration of phenol, acetone, downstream of polycarbonate or epoxy resin will still be the main mode in the construction of bisphenol A units in the future.

(4) The distribution of production capacity will be changed. In the future, China's new bisphenol A production capacity will mainly be concentrated in East China and South China. At that time, the production capacity in East China will still occupy a dominant position, while the production capacity in South China will develop rapidly. Shandong Province will surpass Shanghai to become the largest production province in China. East China will still be the main production and sales area. However, with the completion and commissioning of polycarbonate production units such as Fujian ZhangzhouChimei Chemical Co., Ltd., Hainan Huasheng New Material Technology Co., Ltd. and CNOOC Shell Huizhou Petrochemical Co., Ltd., the demand for bisphenol A will increase significantly in South China.

(5) With the continuous growth of production capacity, the supply of bisphenol A in China will increase greatly, and then the import volume will gradually decrease and the export volume will increase.

(6) Sufficient supply of raw materials will be conducive to reducing costs. With the substantial expansion of the upstream phenol and acetone industries, sufficient raw materials will be provided for the production of bisphenol A, and the price of raw materials is also expected to decline under the fierce market competition, which will help reduce the production cost of bisphenol A and increase the production profit of bisphenol A enterprises.

2. Development suggestions

(1) With the release of new production capacity, the gap between the supply and demand of bisphenol A will gradually decrease in the future, and the market competition will become increasingly fierce. In the future, new construction or expansion of units should be done carefully, and specific conditions such as production technology, raw material sources, and downstream markets need to be considered in an all-round way to avoid redundant construction and reduce waste of human and material resources. It is recommended to adopt upstream and downstream integration for new projects, covering from cumene, phenol/acetone, bisphenol A to polycarbonate or epoxy resin industry, with product diversification and low-cost strategy, in order to avoid industrial risks and strive to maximize corporate benefits .

(2) Most domestic bisphenol A and polycarbonate production units use the same imported technology, which largely restricts the differentiated and high-end development of domestic products. Therefore, it is very important to speed up the development of advanced technology with domestically-made characteristics. Under the background of "double carbon", for existing units, it should innovate the catalytic system and develop new high-efficiency catalysts to improve the catalyst performance and life; optimize process flow and system engineering to improve product quality, reduce energy consumption and material consumption, and reduce "three wastes" emissions, so as to achieve cleaner production, thereby gaining stronger market competitiveness. In addition, it is also necessary to speed up the technology research and development with independent intellectual property rights, gradually get rid of the control of foreign technology, and enhance the competitiveness of the international market.

(3) Continuously develop new application fields of bisphenol A, actively expand exports at the same time, and further expand the bisphenol A market to ease the contradiction between domestic supply and demand.