EVA in strong demand and the market keeps in high prosperity
Click:0    DateTime:Apr.24,2023

By Zhang Xiaohan, China National Chemical Information Center Co., Ltd.

Starting from 2021, with the rapid development of China's photovoltaic industry, domestic EVA materials have entered in a prime period of development as well. In 2022, China's EVA production capacity hit 2.15 million t/a, a year-on-year increase of 21.3%, and its consumption reached about 2.76 million tons, a year-on-year increase of more than 30%. Stimulated by the fast growing demand, a large number of enterprises are preparing to enter the EVA market. At present, there are more than 4 million t/a of newly-built EVA production capacity in China. In the future, the supply gap in the domestic EVA market is expected to be gradually filled, and the supply and demand situation will be changed to a certain extent.

Market supply in 2022 and forecast in the future

1. Supply status: Supply capacity has been significantly enhanced as production capacity has been released steadily.

In 2022, China's EVA production capacity reached 2.15 million t/a in total, a year-on-year increase of 21.3%, but the speed of capacity expansion slowed down compared with 2021. The newly added capacity came from Zhongke (Guangdong) Refinery & Petrochemical Co., Ltd.'s 100 000 t/a kettle-type unit and Xinjiang Dushanzi Tianli High & New Tech Co., Ltd.'s 200 000 t/a tubular-type unit, of which Zhongke unit has been put into production and had stable output. In addition to new units, some original EVA manufacturers are also actively adjusting their production status, among which Levima Shinco and Ningbo Formosa Formosa Plastics Group, through equipment transformation, have increased their production capacity by 50 000 t/a and 28 000 t/a respectively, and Jiangsu Sierbang Petrochemical Co., Ltd., through technical upgrading, has made its continuous production capacity of EVA unit exceed the designed capacity, reaching 350 000 t/a. The production enterprises of China's EVA materials in 2022 are shown in Table 1.

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In 2022, in addition to the steady increase of the total production capacity, various domestic EVA manufacturers were also actively debugging to improve their supply capacity of photovoltaic materials. According to the estimated production and commissioning progress of major EVA manufacturers, the annual output of domestic photovoltaic materials in 2023 will be about 980 000 tons, accounting for about 46% of the total EVA production capacity, and the supply capacity of photovoltaic materials will be significantly improved.

2. Supply forecast: A large number of production capacities are to be released, and the EVA market will be in prosperity.

EVA, as a high-end polyolefin material on the rapid rise, has become the product that many domestic refining and chemical integration projects are competing to lay out. As of February 2023, there are as many as 17 new EVA proposed projects in China, with a total planned capacity of about 4.34 million t/a, of which 11 projects are planned to be put into operation before 2025, with a total capacity of about 3.14 million t/a. Among the new projects that will be put into operation in the near future, Gulei Petrochemical Co., Ltd. has a 300 000 t/a tubular process unit and has been successfully completed the intermediate handover, and it is expected to be officially put into operation in the first quarter of 2023. See Table 2 for details.

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By 2025, the number of domestic EVA manufacturers will increase to 19 and the production capacity will exceed 5 million t/a. If the planned production capacity under construction could be put into production smoothly as schedule, the domestic EVA market will be in a fully competitive environment. In order to ensure the stable production and profitability of EVA, the planning projects from Jinagsu Sierbang Petrochemical Co., Ltd., Levima Advanced Materials Co., Ltd., Zhejiang Petroleum and Chemical Co., Ltd., Guangxi Huayi New Material Co., Ltd., and Yulin Coal Chemical Co., Ltd. have simultaneously arranged the construction of upstream vinyl acetate raw materials.

Market consumption in 2022 and forecast in the future

1. Consumption status: Consumption has increased significantly, and the photovoltaic field has made outstanding contributions.

In 2022, China's EVA consumption was about 2.761 million tons, a year-on-year increase of about 34.3%. Among them, the consumption of EVA in the photovoltaic film field reached 1.303 million tons, a year-on-year increase of about 560 000 tons, accounting for 47% of the total consumption. Foaming material is the second largest consumption field, and the consumed EVA is mainly used to produce foaming soles. In recent years, affected by factors such as the shift of the global shoe material processing industry to Southeast Asia, the engine of EVA consumption in the foaming field has slightly weakened. At present, the growth of EVA consumption in this field is mainly concentrated in the application of high-end brands.

2. Consumption forecast: The photovoltaic industry will continue to lead the rapid growth of EVA consumption, and its proportion of consumption will continue to increase.

Domestic EVA consumption will continue to have a rapid growth in the next few years. It is estimated that the consumption will reach 3.632 million tons in 2025, with an average annual growth rate of about 9.6% from 2022 to 2025. The fastest growing area of consumption will still be photovoltaic film. According to the predicted data from China Photovoltaic Industry Association on installed capacity, the growth rate of newly installed photovoltaic capacity in the world will be more than 10% in the next 2 to 3 years. Considering that the leading photovoltaic film companies are all concentrated in China, it is estimated that the growth rate of EVA consumption in the field of photovoltaic film will be about 14.5% from 2022 to 2025. By 2025, the domestic consumption of photovoltaic grade EVA will reach about 1.956 million tons, accounting for more than 50% of the total EVA consumption.(See Figure 1).

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Figure 1 The consumption structure of China's EVA in 2025

In addition to the photovoltaic field, the application of EVA in cable materials also shows good growth prospects. It is estimated that by 2025, the demand of China's EVA in the field of wire and cable will reach about 494 000 t/a, with an average annual growth rate of about 6.5% from 2022 to 2025. 

Supply and demand status and future forecast

In 2022, the production capacity of EVA in China reached 2.15 million t/a in total, the annual output was about 1.676 million t/a, the consumption was about 2.761 million t/a, the self-sufficiency rate increased from 49.1% in 2021 to 60.7%, and the supply capacity steadily increased.

In the future, with the expansion of production capacity and improvement of quality, the domestic EVA supply capacity will continue to increase. If the planned new production capacity could be put into production smoothly, the total domestic EVA production capacity will exceed 5 million t/a in 2025, and the consumption will reach 3.632 million t/a. By then, except for some high-end applications that will rely on imports, most of the demand can be met by domestic production capacity. The current situation and forecast of EVA supply and demand in China are shown in Figure 2.

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 Figure 2  Current status and forecast of EVA supply and demand in China

Price analysis and forecast

In 2022, the overall price of EVA in China increased first, and then decreased (see Figure 3). In the first half of the year, the overall price of international crude oil was at a high level, and the cost support was relatively strong. In addition, the demand for photovoltaic materials was robust, but the supply was tight, and the market had strong support for prices. With multiple positive factors, EVA had a stronger market dynamic in the first half of the year, and the price went up. However, in the second half of the year, EVA was affected and dragged down because the international crude oil and chemical industry chain was constantly affected by the turmoil in Europe. In addition, in the second half of the year, the market supply was relatively sufficient, but the demand has begun to show signs of weakness. Therefore, the enthusiasm for downstream entry into the market was inhibited, the trading atmosphere of market was sluggish, so the petrochemical enterprises lowered the ex-work quotations when they lost the support of demand. Especially in the fourth quarter, due to the high price of silicon, the demand for EVA in the photovoltaic industry dropped sharply, and EVA price continued to fall.

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Figure 3  The price of domestic EVA in 2022

In 2023, with more domestic EVA projects put into production, the supply will be gradually sufficient, and the average price is expected to drop compared with last year, and the price will rise in stages during the peak demand season. It is estimated that the average price of EVA in 2023 will be RMB15 000 - RMB20 000 per ton.

Conclusion and suggestion

In 2022, China's EVA market was still in a stage of rapid growth in general, and consumption had a rapid growth. Especially in the field of photovoltaics, the production capacity continues to be released, but the speed was slower. At this stage, as a key product type for domestic development, photovoltaic-grade EVA is in urgent need to increase the production capacity of photovoltaic materials, and the product quality and stability need to be enhanced. Domestic photovoltaic-grade EVA not only needs to have an advantage in price, but also needs to improve market acceptance in terms of performance.

The next few years will still be the peak period of EVA construction. EVA manufacturers should not only seize the golden period of the material's development, but also pay close attention to the changes in market supply and demand to prevent the risk of overcapacity.