Future of Adipic Acid Market in China

CCM Data & Primary Intelligence

Website: http://www.cnchemicals.com Tel: +86-20-3761 6606

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CCM Data & Primary Intelligence Description: It is the first edition report for adipic acid market in China from CCM. After anti-dumping investigation into and anti-dumping duties levied on imported adipic acid respectively in 2008 and 2009, China’s adipic acid industry has undergone great changes in the past two years. What are the changes in production, consumption, import and export, competitive landscape in China’s adipic acid industry? What is the trend of China’s adipic acid industry? CCM will give you the right answers in this report. The report also covers the following aspects of China’s adipic acid industry: - Government regulations on adipic acid industry in China, especially anti-dumping policy - Price competition between domestic and overseas adipic acid - Impact of anti-dumping on future import and price - All adipic acid producers in China and their plans for future adipic acid projects - Strengths and weaknesses in China’s adipic acid production - Comparison between domestic and overseas adipic acid in quality and consumption - Value, structure, and distribution of adipic acid consumption in China - Forecast on adipic acid consumption in next five years, especially in key consumption fields - Investment opportunities in China’s adipic acid industry Main content: No.

Content

Page

Executive summary

1

Methodology and source

2

I

Global adipic acid market and China’s position

5

II

China’s anti-dumping policy on adipic acid

10

II-1

Government’s regulations

10

II-2

Import and export analysis 2005~2009

11

II-3

Price competition between domestic and overseas adipic acid

15

II-4

Impact on future import and domestic price

17

III

Adipic acid production in China

19

III-1

Historical adipic acid production 2005~2009

19

III-2

Strengths and weaknesses in production

23

III-3

Future projects and trend

24

III-4

Forecast on adipic acid production 2010~2014

25

IV

Adipic acid consumption in China

26

IV-1

Consumption situation

26

IV-2

Consumption fields

28

IV-3

Quality and consumption comparison between domestic and oversea adipic acid

31

IV-4

Forecast on adipic acid consumption 2010~2014

32

V

Market channels and shares of domestic and overseas producers

35

VI

Competitive landscape

38

VII

Conclusion and opportunities

40

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CCM Data & Primary Intelligence VIII

Profile

41

VIII-1

Key producers

41

VIII-1-1

PetroChina Liaoyang Petrochemical Co., Ltd.

41

…

43

VIII-1-6

Taiyuan Chemical Industry Co., Ltd.

48

VIII-2

Key end users

50

VIII-2-1

Yutian Chemical Industry

50

…

50

VIII-2-18

Zhejiang Longfeng Chemical Industry Co., Ltd.

60

Executive summary: In the past two years, with technology breakthrough and anti-dumping duties levied on imported adipic acid from the US, EU and South Korea, adipic acid capacity of China has expanded rapidly, which has changed the pattern of global adipic acid industry. Before 2008, owing to influx of imported adipic aicd with lower price, China’s adipic acid production entered a stagnation stage, with no capacity expansion in 2005~2007, which resulted in the increasing Chinese adipic acid dependency on import. For instance, xx of Chinese adipic acid was imported in 2007, while xx in 2005. Meanwhile, the lower price of imported products pushed down the settlement price and reduced the profitability of domestic producers. Fortunately, the situation has changed since 2008: after Chinese government started to conduct anti-dumping investigation on imported adipic acid from the US, EU and South Korea, some new entrants were engaged in adipic acid production, such as Shandong Haili Chemical Co., Ltd., Shandong Hongye Group, and Xinjiang Dushanzi TianLi High＆New Tech Co., Ltd. After the capacity released, China’s self-sufficiency rate of adipic acid was increasing. As for consumption, driven by rapid development of PU sizing, PU resin for shoe sole and nylon 66 salt, consumption of adipic acid achieved a CAGR of xx in 2005~2009, despite its growth rate was negative in 2008 impacted by global economic crisis. PU sizing, PU resin for shoe sole and nylon 66 salt are the three largest downstream products of adipic acid, accounting for xx, xx, xx separately in total consumption volume in 2009. With increasing new entrants in this field and expanding capacity in the coming years, competition in China’s adipic acid market will be more intense for both domestic and overseas producers. Character of CCM' Report: The aim of this report is to provide powerful assistance to the strategy group and the management team in making correct decision as how to penetrate the ever-increasing China market and how to catch the maximum commercial opportunities. The report is formulated independently by CCM’s professional market researchers, based on the first-hand and primary data which are analyzed by scientific methodology, confirmed with both manufacturers/end users/traders and legal authorities, and presented in a logic way. Sample pages： Website: http://www.cnchemicals.com Tel: +86-20-3761 6606

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CCM Data & Primary Intelligence I Global adipic acid market and China’s position ¾

Global adipic acid market

In past few years, global adipic acid supply was in shortage, pushing its price up. However, with the sharp rising of China’s adipic acid production in the past two years…..

4,000,000

20%

3,600,000

16%

3,200,000

12%

2,800,000

8%

2,400,000

4%

2,000,000

Growth rate

Capacity and output

Figure I-1 Global capacity, output of adipic acid and their growth rates, 2005~2009

0% 2005 2006 Capacity (t/a)

2007

Grow th rate of capacity Source: CCM International

In 2009, total about

00000

2008 Output (tonne)

2009

Grow th rate of output

active manufacturers were engaged in adipic acid production all over the

world and Invista was the largest one. Table I-1 Main adipic acid producers in the world, 2009 No.

Name

Country

Capacity, (t/a)

Total, (t/a)

Share by capacity

1

00000000

US

00000000

31.32%

2

Rhodia

000000

00000000

3

00000000

4

00000000

Germany

00000000

300,000

00000000

80,000

5

00000000

6

Asahi Kasei

000000

00000000

7

00000000

140,000

00000000

8

00000000

9

Shandong Haili Chemical Co., Ltd.

China

00000000

Others

-

00000000

Total

-

Source: CCM International

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CCM Data & Primary Intelligence II Chinaâ&#x20AC;&#x2122;s anti-dumping policy on adipic acid II-2 Import and export analysis 2005~2009 Âž

Import situation in 2009 (January to November)

9

Importers

In 2009, over

00000000

enterprises are engaged in adipic acid import in China, among which Zhejiang

Huafon New Materials Co., Ltd. is the largest one, which is also the largest polyurethane producer in China. Table II-2-2 Key importers of adipic acid in China, Jan. ~ Nov. 2009 No.

Name

1

000000000000000000000000000

2

Import volume (tonne)

Value (USD)

Price (USD/kg)

000000

00000000

Zhejiang Longfeng Chemical Industry Co., Ltd.

00000000

3

000000000000000000000000000

00000000

4

000000000000000000000000000

00000000

5

000000000000000000000000000

00000000

6

000000000000000000000000000

00000000

4,384,171

00000000

7

000000000000000000000000000

00000000

8

000000000000000000000000000

00000000

1.04

9

000000000000000000000000000

1,786.000

00000000

10

000000000000000000000000000

00000000

11

000000000000000000000000000

00000000

12

Shanghai Achemical Trading Co., Ltd.

00000000

13

000000000000000000000000000

00000000

1,459,201

00000000

14

000000000000000000000000000

00000000

1.35

15

000000000000000000000000000

00000000

16

000000000000000000000000000

00000000

17

000000000000000000000000000

1,437.100

00000000

18

000000000000000000000000000

00000000

1,686,681

00000000

19

000000000000000000000000000

00000000

20

Jiangsu Light Industrial Products Import & Export (Group)

00000000

Corporation 21

000000000000000000000000000

00000000

0.84

22

000000000000000000000000000

00000000

23

000000000000000000000000000

00000000

24

000000000000000000000000000

1,110.000

00000000

25

000000000000000000000000000

00000000

1,764,627

00000000

Others

00000000

Total

00000000

Source: CCM International

Website: http://www.cnchemicals.com Tel: +86-20-3761 6606

Email: econtact@cnchemicals.com Fax: +86-20-3761 6968

CCM Data & Primary Intelligence III Adipic acid production in China Âž

Adipic acid production

After dramatic development in the past two years, the capacity of adipic acid has reached 00000000t/a by the end of 2009, compared with output of 00000000 tonnes in 2009. Figure III-1-1 Adipic acid production situation in China, 2005~2009 80%

500,000 60% 400,000 300,000

40%

200,000

Growth rate

Capacity and output

600,000

20% 100,000 0

0% 2005 2006 Capacity (t/a)

2007

Grow th rate of capacity

2008 Output (tonne)

2009

Grow th rate of output

Source: CCM International

Table III-1-1 Brief introduction of all adipic acid producers in China, 2009 No.

English name

Abbreviation

Location

Ownership

Status

Capacity (t/a)

2009

2008

2009

2008

1

000000

State-owned

000000

2

000000

3

Shandong Haili Chemical Co., Ltd.

000000

4

000000

5

000000

6

000000

Zhejiang

000000

Active

000000

7

000000

Idle

000000

8

000000

9

000000

-

000000

Total Source: CCM International

IV Adipic acid consumption in China IV-1 Consumption situation After a gloomy demand in 2008, the apparent consumption of aidpic acid in China reached â&#x20AC;Ś..

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CCM Data & Primary Intelligence Table IV-1-1 Apparent consumption of adipic acid in China, 2005~2009 Year

Output (tonne)

Import (tonne)

Export (tonne)

Apparent consumption

Total value

(tonne)

(USD)

2005

000000000000

0000000000

000000000000

2006

0000000000

000000000000

2007

000000000000

0000000000

000000000000

2008

000000000000

407,447

000000000000

2009

000000000000

0000000000

Source: CCM International

VI Competitive landscape With fast capacity expansion in China, global adipic acid industry landscape has undergone considerable changes in the past two years: Table VI-1 SWOT analysis between domestic and overseas adipic acid producers Item

S (Strength)

W (Weakness)

Domestic

9

000000000000

9

000000000000

producers

9

Low labor cost

9

000000000000000000

9

000000000000

Oversea producers

9

000000000000

9

000000000000

9

000000000000000000

9

000000000000

O (Opportunities) 9

Huge

market

T (Threatens) in

9

000000000000

9

Global economy

China 9

000000000000

9

000000000000

9

000000000000

slump 9

000000000000

Source: CCM International

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Future of Adipic Acid Market in China

Published on Oct 21, 2010

Guangzhou CCM Information Science & Technology Co., Ltd.

The report also covers the following aspects of China’s adipic acid industry: - Government regulations on adipic acid industry in China, especially anti-dumping policy - Price competition between domestic and overseas adipic acid - Impact of anti-dumping on future import and price - All adipic acid producers in China and their plans for future adipic acid projects - Strengths and weaknesses in China’s adipic acid production - Comparison between domestic and overseas adipic acid in quality and consumption - Value, structure, and distribution of adipic acid consumption in China - Forecast on adipic acid consumption in next five years, especially in key consumption fields - Investment opportunities in China’s adipic acid industry