CCM Data & Primary Intelligence
Production and Market of Paraformaldehyde in China The Sixth Edition May 2010
Researched & Prepared by:
Guangzhou CCM Information Science and Technology Co., Ltd Guangzhou, P. R. China
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Email: econtact@cnchemicals.com Fax: +86-20-3761 6968
CCM Data & Primary Intelligence Description: With rapid development in recent years, China has become the largest PF producer in the world, as well as the world’s biggest PF consumer. Its PF production capacity has reached 442,000/t in 2010, up over 10% than that in the end of 2009. And both China’s capacity and consumption of PF are estimated to take up over 50% of the global total currently. However, both the output and consumption of PF grew much slower than in 2007~2008 due to the downturn of downstream industries and financial crisis. The report mainly focuses on the following problems: The production situation of PF in China: including major producers, development trend of production technology, pricing of PF in recent years and etc. Changes in China’s import and export of PF in recent years. Consumption structure of PF in China in recent years. Factors influencing the development of PF. Chinese PF industry is greatly influenced by development of its downstream industries, especially glyphosate in herbicide. At present, there are 2 major production pathways in glyphosate production , namely AEA pathway and IDA pathway. Using PF as raw material is only suitable for AEA pathway. Affected by global financial crisis, the demand for glyphosate has kept slumping since the latter half of 2008, as well as the price of glyphosate. Further more, owing to environmental problems, AEA pathway in the production of glyphosate is facing increasingly intense competition from IDA pathway. Meanwhile, China’s PF industry has seen signs of overcapacity in recent years. How these factors will influence PF development in China in the future? Main content: No. Code I I-1 I-2 I-3 I-3.1 I -3.2 I-4 I-5 I-6 I-6.1 I-6.2 I-7 I-7.1 I-7.2 I-7.3 I-8 I-8.1
Content Main content Executive Summary Production & Market Information Properties of PF Brief Introduction to the Development History of PF in China Current Production Situation of PF in China Summary of producers Summary of production Pricing of PF in recent years Brief Introduction to the raw material - formaldehyde Brief Introduction to Technology of PF in China Summary of PF technology in China in 2007 Brief Introduction to PF Research Situation in China Analysis of Import & Export Situation of PF in recent years Overall Situations of PF Import & Export in the past Analysis of PF Import in 2001~ 2009 Export Situation of PF in 2001~2007 Consumption Pattern of PF in China Consumption Situation in Brief
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Page 0 5 8 8 10 18 18 24 32 36 39 39 40 49 49 54 69 78 78
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CCM Data & Primary Intelligence I-8.2 I-8.3 I-8.4 I-9 I-9.1 I-9.2 I-10 II II-1 II-1.01 … II-1.22 II-2 II-2.1 … II-2.5 II-3 II-3.01 … II-3.03
Consumption situation of PF in agrochemical Industry Consumption Situation of PF in Resin Industry Consumption Pattern of PF in Pharmaceutical Industry Forecast of PF industry in the future Factors influencing the development of PF Supply and demand forecast to 2012 Conclusion Situation of Chinese Producers Brief Introduction to Active Producers in China Jiangsu Zhenjiang Lee Chang Yung General Chemical Co., Ltd. … Shandong Linyi Jumeng Industry and Trade Co., Ltd Brief Introduction to Idle Producers in China Shandong Yucheng Dayu Fine Chemical Co., Ltd. … Anhui Anqing Huantai Chemical Co., Ltd. Brief Introduction to Potential Producers in China Shanxi Sanwei Group Co., Ltd. … Xinjiang Xiyu Loulan Petrochemical Co., Ltd.
81 91 94 94 94 96 98 99 99 99 0 142 144 144 0 147 147 147 0 148
Executive summary: Production and Producers After fast expansion driven by increasing demand in 2000~2010, especially in 2006~2010, China has become the world’s largest producer of PF in the world. As in May 2010, China owns the total PF capacity of xxxxxxxt/a, increasing by over 10% than that at the end of 2009. However, the operation rate is low due to the gloomy demand from glyphosate, the most important downstream product of PF. In 2009, the total PF output is xxxxxxx tinnes in China only, up xxxxx over 2008, which is far lower than that in 2008, up xxxxxx over 2007. With the output increase of China’s PF, market share of domestic PF has been growing steadily from 2002, hitting the history peak at xxxx in 2009. As in May 2010, there are xx PF producers in China, including xx active and x idle. Despite the gloomy market, x companies are still planning to engage in PF production with the potential capacity of xxxxxxt/a. Zhenjiang LCY, Hebei Yinhe and Shandong Guoguang are still the top x PF producers in China in 2010. Pricing In 2009, affected by the sluggish glyphosate market and unrecovered price of methanol, domestic PF’s mainstream price had been kept at a low level of about USDxxx/t~xxx/t (RMBxxxx/t~xxxxx/t). Since the end of 2009, along with a rally of methanol price, PF price has been going up slowly. However, as the market of glyphosate, PF’s most important downstream product, has not begun to recover significantly yet and glyphosate price is suppressed due to the fierce competition, most of PF production lines are still running at a low operating rate and PF price is not able to go up.
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CCM Data & Primary Intelligence Production technology of PF in China The traditional PF technology in China is the rake-drying method, and it uses 37% industrial formaldehyde as the raw material. Chinese PF producers have also introduced foreign technology in the production of PF from abroad. The foreign technology adopts 50%-55% industry formaldehyde as raw material. By May 2010, there are xx PF producers adopting rake-drying method in PF production, with total capacity of xxxxxxxt/a capturing xxxx% of the total in China. And the rest x PF manufacturers with total capacity of xxxxxxxt/a adopt spray drying method, including China’s largest PF producer Zhenjiang LCY. Import & Export PF import volume had been large from 2000~2005, which was around xxxxxx to xxxxxx tonnes, accounting for more than xx% of the national apparent consumption of this year. And in 2003, import volume of PF hit historical record, reaching xxxxxx tonnes, accounting for xxxx% of the total apparent consumption of PF in 2003. But since 2006, PF import volume has gradually fallen, leading to decreasing market share of imported PF in China, to xxxxxx tonnes and xxxx% in 2009 respectively. At present, PF’s export volume is still small compared with its import volume. However, the situation is changing since the past few years, and more and more producers are planning to break into oversea market. In 2009, China’s PF export volume increased greatly from xxxxx tonnes in 2008 to xxxxx tonnes, up xxxxx%. Consumption & Demand On the whole, PF consumption volume in China is increasing steadily and fast with the CAGR of xxxx% from 2000 to 2009. However, the growth is slowing down. In 2009, China consumed xxxxxxx tonnes PF, up xxx% over the previous year, and the growth rate is much lower than that in 2008, when PF consumption in China increased by xxxx% over 2007. Impacted by the financial crisis and the unrational business ventures in investing glyphosate industry, the glyphosate industry witnessed a serious downturn in 2009, which greatly slowed down the demand for PF. 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：
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Executive Summary
Production and Producers
After fast expansion driven by increasing demand in 2000~2010, especially in 2006~2010, China has become the world’s largest producer of PF in the world. As in May 2010, China owns the total PF capacity of xxxxxxxt/a, increasing by over 10% than that at the end of 2009. However, the operation rate is low due to the gloomy demand from glyphosate, the most important downstream product of PF. In 2009, the total PF output is xxxxxxx tinnes in China only, up xxxxx over 2008, which is far lower than that in 2008, up xxxxxx over 2007. With the output increase of China’s PF, market share of domestic PF has been growing steadily from 2002, hitting the history peak at xxxx in 2009. As in May 2010, there are xx PF producers in China, including xx active and x idle. Despite the gloomy market, x companies are still planning to engage in PF production with the potential capacity of xxxxxxt/a. Zhenjiang LCY, Hebei Yinhe and Shandong Guoguang are still the top x PF producers in China in 2010.
Pricing
In 2009, affected by the sluggish glyphosate market and unrecovered price of methanol, domestic PF’s mainstream price had been kept at a low level of about USDxxx/t~xxx/t (RMBxxxx/t~xxxxx/t). Since the end of 2009, along with a rally of methanol price, PF price has been going up slowly. However, as the market of glyphosate, PF’s most important downstream product, has not begun to recover significantly yet and glyphosate price is suppressed due to the fierce competition, most of PF production lines are still running at a low operating rate and PF price is not able to go up.
Production technology of PF in China
The traditional PF technology in China is the rake-drying method, and it uses 37% industrial formaldehyde as the raw material. Chinese PF producers have also introduced foreign technology in the production of PF from abroad. The foreign technology adopts 50%-55% industry formaldehyde as raw material. By May 2010, there are xx PF producers adopting rake-drying method in PF production, with total capacity of xxxxxxxt/a capturing xxxx% of the total in China. And the rest x PF manufacturers with total capacity of xxxxxxxt/a adopt spray drying method, including China’s largest PF producer Zhenjiang LCY.
Import & Export
PF import volume had been large from 2000~2005, which was around xxxxxx to xxxxxx tonnes,
accounting for more than xx% of the national apparent consumption of this year. And in 2003, import volume of PF hit historical record, reaching xxxxxx tonnes, accounting for xxxx% of the total apparent consumption of PF in 2003. But since 2006, PF import volume has gradually fallen, leading to decreasing market share of imported PF in China, to xxxxxx tonnes and xxxx% in 2009 respectively. At present, PF’s export volume is still small compared with its import volume. However, the situation is changing since the past few years, and more and more producers are planning to break into oversea market. In 2009, China’s PF export volume increased greatly from xxxxx tonnes in 2008 to xxxxx tonnes, up xxxxx%.
Consumption & Demand
On the whole, PF consumption volume in China is increasing steadily and fast with the CAGR of xxxx% from 2000 to 2009. However, the growth is slowing down. In 2009, China consumed xxxxxxx tonnes PF, up xxx% over the previous year, and the growth rate is much lower than that in 2008, when PF consumption in China increased by xxxx% over 2007. Impacted by the financial crisis and the unrational business ventures in investing glyphosate industry, the glyphosate industry witnessed a serious downturn in 2009, which greatly slowed down the demand for PF. I Production & Market Information I-3 Current Production Situation of PF in China I-3.1 Summary of producers
Table I-3.1-2 Capacity of major producers in China from 2004 to May 2010, unit: tonne -1 No.
Status
Cap.
Output
Cap.
Output
Cap.
Output
Cap.
Output
Cap.
Output
Cap.
Output
Cap.
Output '10
'10
'04 t/a
'04 tonne
'05 t/a
'05 tonne
'06 t/a
'06 tonne
'07 t/a
'07 tonne
'08 t/a
'08 tonne
'09 t/a
'09 tonne
'10 t/a
tonne est
Abbr.
II-1.01
Zhenjiang LCY
xxxxxx
xxxxxx
xxxxxx
xxxxxx
xxxxxx
xxxxxx
xxxxxx
xxxxxx
xxxxxx
xxxxxx
xxxxxx
xxxxxx
xxxxxx
xxxxxx
xxxxxx
II-1.02
xxxxxxxxxxxx
xxxxxx
xxxxx
xxxxx
xxxxx
xxxxx
xxxxxx
xxxxxx
xxxxxx
xxxxxx
xxxxxx
xxxxxx
xxxxxx
xxxxxx
xxxxxx
xxxxxx
II-1.03
xxxxxxxxxxxxx
xxxxxx
x
x
x
x
x
x
x
x
xxxxxx
xxxxxx
xxxxxx
xxxxxx
xxxxxx
xxxxxx
II-1.04
xxxxxxxxxxxxxx
xxxxxx
x
x
x
x
x
x
xxxxx
xxxxx
xxxxxx
xxxxxx
xxxxxx
xxxxxx
xxxxxx
xxxxxx
II-1.05
xxxxxxxxxxxxx
xxxxxx
xxxxx
xxxxx
xxxxx
xxxxx
xxxxx
xxxxx
xxxxxx
xxxxxx
xxxxxx
xxxxx
xxxxxx
xxxxx
xxxxxx
xxxxxx
II-1.06
xxxxxxxxxxxxxx
xxxxxx
3,000
xxxxx
xxxxx
xxxxx
xxxxx
xxxxx
xxxxx
xxxxx
xxxxxx
xxxxx
xxxxxx
xxxxx
xxxxxx
xxxxx
II-1.07
xxxxxxxxxxxxxxx
xxxxxx
x
x
xxxxx
xxx
xxxxx
xxxxx
xxxxx
xxxxx
xxxxxx
xxxxx
xxxxxx
xxxxx
xxxxxx
xxxxx
II-1.08
xxxxxxxxxxxxxxx
xxxxxx
x
x
x
x
x
x
xxxxx
xxxxx
xxxxxx
xxxxx
xxxxxx
xxxxx
xxxxxx
xxxxx
II-1.09
xxxxxxxxxxxxxxxxx
xxxxxx
xxxxxx
xxxxx
xxxxxx
xxxxx
xxxxxx
xxxxx
xxxxxx
xxxxx
xxxxxx
xxxxx
xxxxxx
xxxxx
xxxxxx
xxxxx
II-1.10
xxxxxxxxxxxxxxx
xxxxxx
x
x
x
x
x
x
xxxxx
xxx
xxxxx
xxxxx
xxxxx
xxxxx
xxxxxx
xxxxx
II-1.11
xxxxxxxxxxxxxxx
xxxxxx
x
x
x
x
x
x
x
x
x
x
xxxxxx
xxxxx
xxxxxx
xxxxx
II-1.12
xxxxxxxxxxxxxxx
xxxxxx
x
x
x
x
x
x
x
x
x
x
xxxxxx
xxxxx
xxxxxx
xxxxx
II-1.13
xxxxxxxxxxxx
xxxxxx
xxxxx
xxxxx
xxxxx
xxxxx
xxxxx
xxxxx
xxxxx
xxxxx
xxxxx
xxxxx
xxxxx
xxxxx
xxxxx
xxxxx
II-1.14
xxxxxxxxxxxxxx
Active
x
x
x
x
x
x
x
x
xxxxx
xxxxx
xxxxx
xxxxx
xxxxx
xxxxx
II-1.15
xxxxxxxxxxxxxxxx
xxxxxx
x
x
x
x
x
x
x
x
xxxxxx
xxxxxx
xxxxx
xxxxxx
xxxxx
II-1.16
xxxxxxxxxxxxxxxxx
xxxxxx
x
x
x
x
x
x
x
x
xxxxxx
xxxxx
xxxxxx
xxxxx
xxxxxx
xxxxx
II-1.17
xxxxxxxxxxxxxx
xxxxxx
x
x
x
x
xxxxx
x
xxxxx
x
xxxxx
xxxxx
xxxxx
xxxxx
20,000
xxxxx
II-1.18
xxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxx
x
x
x
x
x
x
x
x
xxxxx
xxxxx
xxxxx
xxxxx
xxxxx
xxxxx
II-1.19
xxxxxxxxxxxxxxxx
xxxxxx
x
x
3,000
x
xxxxx
x
xxxxx
x
xxxxx
xxxxx
xxxxx
xxxxx
xxxxx
xxxxx
II-1.20
xxxxxxxxxxxxxxxxxx
xxxxxx
x
x
x
x
x
x
x
x
xxxxx
x
xxxxx
xxxxx
xxxxx
xxxxx
II-1.21
xxxxxxxxxxxxx
xxxxxx
x
x
x
x
x
x
x
x
xxxxx
xxxxx
xxxxx
xxxxx
xxxxx
xxxxx
II-1.22
xxxxxxxxxxxxxxx
xxxxxx
xxx
x
xxx
x
xxx
x
1,500
x
xxxxx
xxx
xxxxx
xxxxx
xxxxx
xxxxx
Source: CCM International
I-8.1 Consumption Situation in Brief Some characteristics of PF have facilitated its wide application: Easy for shipping and storage because of its granular form High content of formaldehyde No water content (only trace amount) The excellent properties of PF decide that this material can be used in various situations. On the whole, PF consumption volume in China is increasing steadily and fast with the CAGR of xxxx% from 2000 to 2009. However, the growth is slowing down. In 2009, China consumes xxxxxxx tonnes PF, up xxx% over the previous year, and the growth rate is much lower than that in 2008, when PF consumption in China increased by xxxx% over 2007. There are a few reasons caused the slowdown: Financial crisis Overstock of glyphosate in oversea market Price fall of crude oil ……