FocusChina adipic acid tumbles 36% on weak demand from PU sector

07 November 2011 06:39  [Source: ICIS news]

Polyurethane gloves. PU accounts for 60-70% of the total consumption of adipic acid in China.By Doreen Zhao

SHANGHAI (ICIS)--Adipic acid prices in China have shed 36% over the past two months because of weak demand that will likely to continue for the remainder of the year, market sources said on Monday.

Spot values declined by around yuan (CNY) 7,000/tonne ($1,104/tonne) from end-August to CNY12,200/tonne at the end of October, according to ICIS data.

Surplus adipic acid supply in the international markets found its way into China in the months of August and September, dampening domestic prices of the material given lacklustre demand, market sources said.

China imported a total of 9,664 tonnes of adipic acid in September, up 31% month on month and more than triple the volume recorded in August, data from China Customs showed.

Domestic production was lower than usual since August but this failed to halt the slide in prices of adipic acid.

For the three months covering August-October, China’s output of adipic acid totalled 168,100 tonnes, according to Chemease, an ICIS service in China.

The number translates to a monthly production of 56,000 tonnes, about 8% lower than the usual output each month, partly because of turnarounds at major facilities.

In September, Henan Shenma conducted a 20-day maintenance at its 150,000 tonne/year adipic acid plant, which has a 50,000 tonne/year and a 100,000 tonne/year lines, at Pingdingshan, Henan province.  

Xinjiang Tianli, meanwhile, had a 45-day turnaround at its 75,000 tonne/year facility at Dushanzi from August to September.

Demand for adipic acid coming from the main downstream polyurethane (PU) sector has been extremely weak. In late October, PU plants operate at just about half of capacity, market sources said.

PU accounts for 60-70% of the total consumption of adipic acid in China.

China’s exports of PU derivatives like synthetic leather have weakened as the country’s major trading partners - the US and the eurozone – are embroiled with their respective economic and financial difficulties, market sources said.

Within China, PU producers face credit constraints as the government continued to tighten its monetary policy to halt the continued spikes in consumer prices. The appreciation of the yuan against the US dollar also poses challenges to exporters.

Going into next year, China is expected to see its domestic production ballooning to 1.76m tonnes/year, more than double the current capacity of 730,000 tonnes/year, with a total of eight new projects slated to come on stream in the near term.

Producer

Capacity (tonnes/yr)

Start-up dates

Note

Shandong Haili

150,000

End- 2011

 

Hualu Hengsheng

160,000

End-2011

 

Chongqing Fuxiang

160,000

Early 2012

For own nylon6-6

Shandong Hongye

140,000

Early 2012

 

Shandong Haili

150,000

Early 2012

For own nylon6-6

Henan Shenma

50,000

Early 2012

 

Hebei Kailuan

150,000

2012

 

Shanxi Yangmei

70,000

2012

 

($1 = CNY6.34)

Please visit the complete ICIS plants and projects database
Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections


By: Doreen Zhao



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