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The Price of Adipic Acid Is Rising, And Demand Is Expected To Drive The Prosperity

ECHEMI 2022-04-21

Since 2003, the price of adipic acid has gone through three complete cycles. The industry pattern has experienced from the collection of anti-dumping duties by domestic companies, the expansion of adipic acid production capacity by Chinese companies to achieve import substitution, and the concentration of domestic production capacity in leading manufacturers. By 2021 , China has become the world's largest producer and major exporter of adipic acid.


The first cycle (2005-2008): The supply side drives the industry cycle. Since 2003, the global nylon fiber, polyurethane, plasticizer and many other downstream fields have developed in an all-round way, and the demand for adipic acid has grown steadily, and foreign companies have actively raised the price of adipic acid. In the first half of 2006, accidents occurred in the adipic acid production lines of INVISTA, Rhodia France, and LANXESS in Germany. The supply of adipic acid was tight, and the tightening of supply and demand pushed the price of adipic acid to a historical high of 26,000 yuan/ton. Since the second half of 2006, the domestic production capacity has expanded rapidly. At the same time, the increase in labor costs and the reduction of export tax rebates have made the downstream industry of adipic acid increase the cost and reduce the demand. The international oil price at the cost side continued to decline, and the price of pure benzene, the raw material, fell, causing the price of adipic acid to enter a downward channel, and the price fell to a minimum of 6,500 yuan/ton.


The second cycle (2009-2015): import substitution of domestic production capacity. In 2009, INVISTA shut down a large amount of adipic acid production capacity, superimposed on my country's announcement to impose anti-dumping duties on imported adipic acid, under the circumstance that the downstream demand for PA66 and polyurethane has increased significantly, domestic adipic acid is in short supply, and the price has risen rapidly, and the price was the highest at the end of 2010. rose to 24,000 yuan / ton. In 2011, many domestic enterprises took a fancy to the high profits of adipic acid, and the new production capacity was put into production around 2012. During this period, the international oil price fell rapidly, and the price of adipic acid continued to fall to the historical low of 5,400 yuan/ton at the end of 2015.


The third cycle (2016-2019): Cost prices determine prosperity. In 2016, my country announced that it would continue to impose anti-dumping duties on imports of adipic acid from the United States, Europe, and South Korea to support domestic adipic acid prices. On the cost side, rising international oil prices drove commodity prices. On the demand side, my country has implemented the "ban and abolition order", and the demand for downstream substitution of adipic acid has increased. On the supply side, Chongqing Huafeng was overhauled, the supply and demand of adipic acid were tight, and the price rose to about 13,000 yuan/ton. In 2018, new domestic adipic acid production capacity was put into operation one after another, the supply continued to increase, and the price of adipic acid continued to decline. After the outbreak, the price of adipic acid quickly fell to 5,700 yuan/ton.


A new round of business cycle (2020-present): Cost and demand are both driving the high business cycle. Beginning in the second half of 2020, China's unique global supply chain advantage and overseas economic recovery have led to a surge in adipic acid exports. At the same time, international crude oil prices have continued to rise to support the cost side. The continuous improvement in supply and demand has pushed the price of adipic acid to rise to the current 12,200. Yuan / ton. At present, adipic acid is under the background of sharp rise in raw material prices and surge in export volume to boost prices. On the supply side, leading adipic acid companies still have plans to expand production. On the demand side, the localization progress of the PA66 raw material adiponitrile downstream of adipic acid has accelerated and the degradable plastic PBAT project has been planned on a large scale. We believe that the demand side will continue to catalyze the high prosperity of the industry, and adipic acid is expected to reach a new round of high prosperity.

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