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Home > Chemial News > Paint & Coating News > Bisphenol A Production Capacity Will Start to Expand Significantly in 2022, Supply Will Exceed Demand, And Marketing Competition Will Become Increasingly Fierce

Bisphenol A Production Capacity Will Start to Expand Significantly in 2022, Supply Will Exceed Demand, And Marketing Competition Will Become Increasingly Fierce

ECHEMI 2022-01-14

From 2015 to 2021, China's bisphenol A production continued to grow and the development was relatively stable. In 2021, China's bisphenol A production is expected to reach about 1.7 million tons, and the comprehensive operating rate of bisphenol A units is about 77%, which is at a high level. It is expected that starting from 2022, with the successive commissioning of bisphenol A plants under construction, the annual output is expected to gradually increase. From 2016 to 2020, the import of bisphenol A in my country will grow slowly, and the import dependence of bisphenol A is close to 30%. It is expected that with the substantial increase in domestic production capacity in the future, the import dependence of bisphenol A is expected to continue to decline.

 

The downstream demand structure of bisphenol A is concentrated, and it is mainly used for PC and epoxy resin, accounting for almost half of each. In 2021, the apparent consumption of bisphenol A is expected to be about 2.19 million tons, a year-on-year increase of 2%. In the future, with the successive production of new downstream PC and epoxy resin units, the demand for bisphenol A is expected to increase significantly.

 

There are more new production capacity of PC, which drives the growth of bisphenol A demand. my country is an importer of polycarbonate, and there is an urgent need for import substitution. According to the statistics of Baichuan Yingfu, in 2020, my country's PC production was 819,000 tons, a year-on-year decrease of 19.6%, the import volume was 1.63 million tons, a year-on-year increase of 1.9%, the export volume was about 251,000 tons, and the apparent consumption was 2.198 million tons, a year-on-year decrease. 7.0%, the self-sufficiency rate is only 37.3%, the import demand of my country's PC is urgent.

 

From January to October 2021, my country's PC output was 702,600 tons, a year-on-year decrease of 0.38%, domestic PC imports were 1.088 million tons, a year-on-year decrease of 10.0%, and exports were 254,000 tons, a year-on-year increase of 41.1%. Import dependence is expected to continue to increase.

 

The wind power industry, electronic materials and other industries drive the continuous expansion of epoxy resin. The main application fields of domestic epoxy resin are coatings, composite materials, electronic appliances and adhesives.

 

It is expected that in the next five years, among the many downstream application fields of epoxy resin, composite materials and epoxy resin for capital construction will become the main fields supporting the growth rate of epoxy resin production. The demand for wind power continues to increase, and the construction and maintenance of high-speed railways, highways, and subways and airports in urbanization development and construction will promote the development of epoxy resins. Especially with the advancement of "One Belt, One Road", the demand for epoxy resin will be greatly increased.

 

The PCB industry is the main downstream application of epoxy resin in the electronic and electrical field. The core material of PCB is copper clad laminate, and epoxy resin accounts for about 15% of the cost of copper clad laminate. With the rapid evolution of new-generation information technologies such as big data, Internet of Things, artificial intelligence, and 5G, as the basic material of the electronics industry, it is expected that the demand and growth rate of copper clad laminates will show a trend of increasing year by year.

 

Bisphenol A is in a period of high prosperity. We assume that the downstream demand for bisphenol A will be put into production on schedule. At present, the downstream epoxy resin of bisphenol A has 1.54 million tons of production capacity under construction, and PC has 1.425 million tons of production capacity under construction. These production capacities are in the future. It will be put into production within 2-3 years, and the demand for bisphenol A will be strongly driven. In terms of supply, the supply of bisphenol A itself has maintained a reasonable growth. At present, there is a capacity of 2.83 million tons of bisphenol A under construction, and these production capacities will be completed within 2-3 years. Since then, the industry growth is mainly based on integrated development, and a single set of equipment is independent. The number of production runs has decreased, and the industry growth rate has dropped to a reasonable level.

 

From 2021 to 2030, there are still 5.52 million tons/year of projects under construction in China's bisphenol A industry, which is 2.73 times the production capacity of 2.025 million tons/year at the end of 2020. It can be seen that the competition in the bisphenol A industry will become more intense in the future, and the contradiction between market supply and demand will be reversed. , especially for new entrants, the project operation and marketing environment will become increasingly fierce.

 

As of the end of 2020, there were 11 domestic bisphenol A production enterprises with a production capacity of 2.025 million tons, of which foreign-funded enterprises were 1.095 million tons, private enterprises 630,000 tons, and joint ventures had a production capacity of 300,000 tons, accounting for 54%, 31%, and 15% respectively. From 2021 to 2030, the total production capacity of bisphenol A planned and planned projects in China is 5.52 million tons, and the production capacity is still concentrated in East China. However, with the expansion of the downstream PC industry, the production capacity in South China, Northeast China and Central China has also increased significantly. By then, the distribution and coverage of domestic bisphenol A production capacity will be more balanced. At the same time, with the gradual commissioning of the project, the current situation of less than demand in the bisphenol A market will gradually ease, and it is expected that there will be excess resources.

 

From 2010 to 2020, with the expansion of bisphenol A production capacity, the output showed a substantial growth trend. During the period, the compound increase rate of production capacity was 14.3%, and the compound growth rate of output was 17.1%. The operating rate of the industry was mainly affected by the market price, industry profit and loss and new Influenced by the time when the device is put into production, the operating rate in 2019 peaked at 85.6%. After 2021, with the advent of the new expansion of bisphenol A, the oversupply of the bisphenol A industry will intensify. It is expected that the overall operating rate of bisphenol A in China will show a downward trend from 2021 to 2025. The reasons for the decline in the operating rate are: 1.2021-2025 China's bisphenol A units are newly added year by year, and the production release is later than the production capacity, resulting in a decline in the operating rate from 2021 to 2025; 2. Affected by the intensified contradiction between supply and demand, the downward pressure on the price of bisphenol A is huge, and the high profit situation of the industry gradually disappears. Production costs and profits, and the production intention is low during the loss-making period; 3. The company has annual routine maintenance, and the time varies from 30 to 45 days. The maintenance of the company affects the operating rate of the industry.

 

Under the data expectations of a substantial increase in production capacity and a decline in operating rates in the future, the operational risks of future projects will increase significantly.

 

In terms of industry concentration, CR4 production capacity will account for 68% in 2020, and will drop to 27% in 2030, which shows that the number of participants in the bisphenol A industry has increased significantly, and the status of leading companies in the industry will decline significantly; A downstream demand is mainly concentrated in epoxy resin and polycarbonate, the field distribution is concentrated and the number of large customers is limited. In the future, the competition in the bisphenol A market will intensify. In order to ensure market share, enterprises will be more flexible in the designation of sales strategies.

 

From the perspective of market supply and demand, after 2021, bisphenol A will usher in the trend of capacity expansion again, especially in the next 10 years, the compound growth rate of bisphenol A production capacity will be 9.9%, while the compound growth rate of downstream consumption will be 7.3%. The contradiction between overcapacity and oversupply in the A market is prominent, and some bisphenol A manufacturers with poor competitiveness may face the problems of insufficient follow-up operation and insufficient utilization of equipment.

 

Under the data expectations of a substantial increase in production capacity and a decline in operating rates in the future, the resource flow of future projects and the direction of downstream consumption have become the main focus of existing and future projects.

 

The downstream consumption of bisphenol A in China is mainly composed of epoxy resin and polycarbonate. From 2015 to 2018, epoxy resin consumption accounted for the largest proportion, but with the expansion of PC production capacity, the proportion of epoxy resin consumption showed a downward trend. From 2019 to 2020, the production capacity of PC will expand intensively, while the production capacity of epoxy resin is relatively stable, and the proportion of PC begins to surpass that of epoxy resin. At present, China's basic epoxy resin production capacity is excessive, and it is difficult to break through high-quality and special resin technologies. However, due to the development of wind power, automobiles, electrical and electronic, and infrastructure construction, the consumption of basic epoxy resins and polycarbonates maintains a good growth momentum. From 2021 to 2025, although high-quality and special epoxy resins and PCs will expand simultaneously, the scale of PC expansion will be larger, and the proportion of PC unit consumption is much higher than that of epoxy resins. Therefore, it is expected that the proportion of PC consumption will further expand in 2025. Therefore, from the perspective of downstream consumption structure, PC devices will be the focus of future bisphenol A projects. However, it should be noted that at present, the upstream of new PC installations is mostly equipped with bisphenol A, so the direction of epoxy resin still needs to be an important supplementary concern.

 

From the perspective of the main consumer market, since there are no large-scale bisphenol A production enterprises and no large-scale downstream consumer enterprises in the northwest and northeast, the key analysis will not be made here. East China is expected to turn from undersupply to oversupply in 2023-2024. North China has always been oversupplied. Central China has always maintained a certain supply gap. The South China market will change from insufficient supply to excess supply in 2022-2023, and to a serious excess in 2025. It is estimated that by 2025, the bisphenol A market in China's major regions will be dominated by the consumption of peripheral resources and low-price competition to seize the market. It is recommended that bisphenol A companies consider export as the main consumption direction when considering the surrounding and low-cost outflow to major consumption areas.

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