Source: Bing

Analysis and prospect of BPA supply

There was few production equipment for BPA before 2005, with the total BPA capacity of 58,000t/a in China in 2005. In the past few years, the capacity of BPA kept increasing rapidly. By the end of 2015, the total BPA capacity in China reached 1.15 million t/a, with the supply of 795,000 tonnes, up 37.1% YoY. The capacity utilization rate was 69.1%, down 8.8 percentage points compared to that in 2014.

By the end of 2015, there are 8 BPA manufacturers in China, in which, the production equipment are quite new and are all put into operation after 2005. In those newly expanded capacity, Chang Chun Chemical (JiangSu) Co., Ltd. expanded the BPA capacity of 135,000 t/a, with the total capacity reaching 270,000 t/a. Formosa Industries (Ningbo) Co., Ltd. and Lihuayi Group Co., Ltd. (Lihuayi Group) together expanded BPA capacity of 270,000 t/a.

In the past few years, the BPA capacity showed an upward trend in China. BPA production equipment with 150,000 t/a in Nan Ya Plastics Corporation located in Ningbo has already been put into operation in Feb. 2015. 120,000t/a from Lihuayi Group was to plan to be put into operation at the end of 2015. Sinopec Sabic Tianjin Petrochemical Co., Ltd plans to expand BPA capacity with 240,000t/a. It is predicted that the total BPA capacity would reach 1.3 million t/a in 2017.

Analysis and prospect of BPA demand

The apparent consumption of BPA was 1.329 million tonnes in 2015 in China, up 23.6% YoY, with the self-sufficiency rate of 59.8%, up 5.7 percentage points YoY. In the past few years, the apparent consumption was driven by its downstream markets.

In 2008, the apparent consumption of BPA was 630,000 tonnes and reached 1.329 million tonnes in 2015, with annual average growth of 4% in 2011-2015.

Epoxy resin: China has become one of the most important producers and consumers of epoxy resin in the world. The downstream market of epoxy resin includes coatings, CCL (copper-clad plate), and wind turbine blades. Due to the increasing demand from electronic and electrical industry, coating industry, and composite material industries in China, epoxy resin is developing rapidly.

In coatings, the increasing constructions of containers and vessels, investment on infrastructures like bridges have much driven the application of epoxy resin.

In the past few years, China printed circuit board industry has developed with the growth rate of over 15%. Since 2006, China has replaced Japan to be the biggest producer of printed circuit board in the world, which brought great demand for epoxy resin (electronic grade).

Wind power generating is the most potential generating way in the world expect for hydroelectric generating and its installed capacity is still increasing. Nowadays, wind turbine blades made from reinforced resins is made of epoxy resin. That’s to say, the rising demand in the field of wind power generating would increase the consumption of BPA.

Polycarbonate: As for the downstream market of polycarbonate, the need for CD would keep falling while the development of vehicles, electrical & electronic products and construction industry would drive the need for polycarbonate. Moreover, the import dependence rate of polycarbonate is over 75% currently; thus, the demand for BPA from polycarbonate would keep increasing.

Due to the drive from consumptions of epoxy resin and polycarbonate, the apparent consumption of BPA would be 1.4 million tonnes in 2016.

Analysis and prospect of BPA export and import

The import volume of BPA in 2015 was 534,000 tonnes in China, up 7.7% YoY, with the export value of USD 627.88 million, down 27.6% YoY, while the export volume of BPA was only 500 tonnes in China.

The BPA capacity expansion was not able to stop the importing. The BPA import dependence rate was 40.2% in 2015. The trading volume was 249,000 tonnes, accounting for 46.6% of the total import volume. The import volume from South Korea, Thailand and Taiwan together accounted for nearly 80% of the total import volume. Among it, import volume from Thailand was 151,000 tonnes, accounting for 28.3% of the total; South Korea, 148,000 tonnes, 27.8%; Taiwan, 117,000 tonnes, 22%.

With its import volume accounting for 34.6% of the total, Shanghai City imported most volume of BPA in China in China; Jiangsu Province came next, with its import volume accounting for 22.4% of the total.

Analysis and prospect of BPA market price

The price of BPA collapsed to around RMB7,100/t in Aug. 2015, a record low since 2010. In fact, the historically lowest price of BPA was RMB6,800/t in 2008 after the financial crisis. That’s to say, the low price in Aug. 2015 came really close to the lowest price in 2008. Even worse, at the end of Oct. 2015, the market price of BPA fell to RMB6,600/t, a new historical low.

Due to different factors, the price of BPA showed a downward trend in 2015. In term of cost, three new production equipment of phenolic ketone had been put into operation successfully, thus the cost wasn’t able to support the BPA price and the price kept falling. In term of supply, BPA was also produced successfully, along with the increasing import volume, there was still enough supply in the market.

In term of demand, the epoxy resin industry developed quite slowly and there was no obvious demand for BPA. Though there was new capacity for polycarbonate, the operation rate was still low and there was limited need for BPA.

However, the market still looks beneficial for BPA. The increasing capacity of its downstream market, epoxy resin and polycarbonate, would drive the demand for BPA. Also, the expanding capacity of its upstream market, phenol and acetone, would assure enough supply of raw material for BPA. The prices of the raw material are likely to fall, which would reduce the production cost for BPA and increase BPA’s production profit. Moreover, there would emerge new chemical enterprises owning the industry chain of phenol, acetone, BPA, epoxy resin, which would be beneficial for the development of BPA.

*The article is edited and translated by CCM. The original one comes from Economic Analysis of China Petroleum and Chemical Industry.

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