By Xu Wenyan, JLC
Domestic supply of adipic acid
Showing an upward trend from 2018 to 2022, China’s adipic acid capacity has reached 2.94 million t/a since 2022, mainly attributable to a 70 000 t/a unit of China Pingmei Shenma Group Nylon Technology Co., Ltd. (put into production in March 2019), a 200 000 t/a unit of Chongqing Huafon Chemical Co., Ltd. (June 2020), a 200 000 t/a unit of Shandong Hualu-Hengsheng Chemical Co., Ltd. (February 2021) and a 200 000 t/a unit of Chongqing Huafon Chemical Co., Ltd. (beginning of 2022). See Figure 1 for more details.
Figure 1 China’s adipic acid capacity and growth from 2018 to 2022
Of the total 2.94 million t/a, north China and Shandong currently boasts a combined capacity of 1.01 million t/a, accounting for 34.18%, slightly higher than 32.31% (950 000 t/a) of southwest China. Central China takes up 15.99%, equivalent to 470 000 t/a, east China with 300 000 t/a makes up 10.2%, and other regions all occupy less than 10% (See Figure 2 for details). According to adipic acid capacity expansion plans in 2023, new capacity – stimulated by soaring PBAT capacity in recent two years – may reach around 4.31 million t/a in the coming years. See Table 1 for details.
Figure 2 Adipic acid capacity proportions in 2023 (by regions)
Domestic adipic acid output was lower than 1.5 million tons in 2018 and 2019, up 5.94% YoY or 84 400 tons YoY to 1.51 million tons in 2020, and up 24.42% YoY or 368 200 tons to 1.87 million tons in 2021. Despite a 200 000 t/a unit starting production, the output for 2022 fell to 1.79 million tons, as many plants have suffered losses since May 2022 and unit overhaul decreased average operating rate to below 50%. See Figure 3 for details.
Figure 3 China’s adipic acid output and growth from 2018 to 2022
China imported 17 687 tons of adipic acid in 2018, and 11 420 tons in 2019. Import volume fell 14.93% YoY or 1 705 tons to 9 715 tons in 2020, but soared 30.6% YoY or 2 973 tons to 12 688 tons in 2021. In 2022, 8 879 tons of adipic acid were imported, dropping 30.02% YoY or 3 809 tons YoY. See Figure 4 for details.
Figure 4 China’s adipic acid import from 2018 to 2022
Domestic demand for adipic acid
Domestic apparent consumption of adipic acid reached 1.04 million tons in 2018, 1.09 million tons in 2019, and 1.21 million tons in 2020 (See Figure 5 for details). In 2021, the apparent consumption surged 23.25% YoY or 281 600 tons to 1.49 million tons, higher than 1.4 million tons (down 6.32% YoY) in 2022, when domestic demand for adipic acid decreased from 2021.
Figure 5 China’s apparent consumption of adipic acid from 2018 to 2022
China exported 370 000 tons of adipic acid in 2018, and 344 000 tons in 2019. Export volume decreased to 305 000 tons in 2020 because of the coronavirus, and surged 30.46% YoY to 398 000 tons in 2021, given that the coronavirus was basically under control that year. As for export volume in 2022, it was up 0.87% YoY to 401 000 tons. See Figure 6 for details.
Figure 6 China’s adipic acid export from 2018 to 2022
Downstream consumption areas of adipic acid mainly include sizing agents, shoe sole, PA66, TPU, polyester polyol and PBAT, with the first two troubled by severe overcapacity and low operating rates in recent years. Figure 7 shows adipic acid consumption proportions.
Figure 7 Domestic adipic acid consumption proportions
Domestic PA66 capacity reached 735 000 t/a and output 354 800 tons, both in 2022, when average operating rate was 50% or so, lower than in 2021 but better than current 37%-50% of domestic nine PA66 plants. In the next three years, projects under construction or planning may increase PA66 capacity by 3.53 million t/a.
At present, PBAT capacity is 1.24 million t/a, and operating rates are 20%-30%. Hence a low adipic acid consumption proportion. However, PBAT industry will become a main consumer of adipic acid, given 1.79 million t/a capacity of PBAT projects under construction and 1.72 million t/a capacity of projects under planning.
Adipic acid supply and demand from January to April 2023
Import volume of adipic acid was up 5.32% YoY to 2 653 tons in the first four months of 2023, with monthly volume exceeding 1 000 tons only in January. Export volume in the four months reached 155 700 tons, up 29.54% from January-April 2022. See Figure 8 for details.
Figure 8 China’s adipic acid import and export during January-April 2023
Domestic output of adipic acid and operating rates both rose during January-March, but fell in April owing to overhaul of many units (e.g. PetroChina Liaoyang Petrochemical Company’s 70 000 t/a unit, suspending production at the end of March). January-April output of adipic acid declined 6.65% YoY or 45 100 tons to 632 700 tons, and average operating rate in the four months was 64.57%, down 5.61 percentage points YoY. Figure 9 shows output and operating rate trends from January to April 2023.
Figure 9 Domestic adipic acid monthly output and operating rate trends from January to April 2023
Adipic acid supply totaled 636 100 tons (down 44 900 tons YoY) in the four months, and meanwhile apparent consumption fell 80 500 tons YoY to 480 400 tons, resulting in oversupply, which may exacerbate, because of decreasing demand in traditional off season (i.e. May-July), end of unit overhaul in May, several new units scheduled to go into operation in the second half of 2023.
