OUTLOOK ’12: China’s phenol supply to grow on new plants in 2012

28 December 2011 06:12  [Source: ICIS news]

By Dolly Wu

SHANGHAI (ICIS)--China’s phenol supply is expected to rise steadily on the back of adequate global supplies, domestic capacity expansion, and an increase in downstream demand in 2012.

China’s total phenol supply in 2012 is forecast at around 1.75m tonnes, or up 7.4% from 2011 while import growth is expected at 3% and domestic production is likely to grow by 11% to around 1m tonnes, industry sources said.

Hong Kong’s Kingboard is planning to bring on line a 320,000 tonnes/year phenol/acetone unit in Jiangsu province in the first half of 2012 while Yanshan Petrochemical plans to expand their existing capacity to 500,000 tonnes/year from 280,000 tonnes/year by the end of 2012.

China will be able to increase capacity to 1.22m tonnes/year by the middle of 2012, according to market sources.

During 2013-2015 period China is targeting to expand total phenol capacity to 3.14m tonnes/year, which would mean an expansion of 1.95m tonnes/year. (please see table below)

China’s imports are expected to continue growing in 2012 on firm demand and volumes are estimated to reach 750,000 tonnes, an increase of 3% from 2011, according to forecast from Chemease, an ICIS Service in China.

Imports of Asian cargoes are expected to be stable in 2012, while cargoes from Europe are expected to increase as no anti-dumping duties are imposed on them. 

Imports from the US are expected to remain steady because of hefty anti-dumping duties imposed on cargoes from there.

At the same time, demand from downstream sectors like BPA is also increasing, so existing phenol facilities are likely to keep running at high operating rates.

Phenolic resins industry remains the key derivative for phenol demand in China, accounting for 50% of phenol consumption.

Phenol resin is widely used in insulation panels, copper clad laminated boards, brake blocks for automobiles and also applicable in automobiles brake blocks, foundry materials, plywood, abrasives and grinding wheels, but its primary application is to make phenolic moulding plastics, which have incomparable advantages of heat resistance and cost-effectiveness.

China has become the major producer of global electrical and electronic products and exports large amounts of products. This has led to rapid growth in phenolic moulding plastics production.

Large-sized producers include Jinan Shengquan Chemical, Shaxian Hongguang, Changshu East-South, Shanghai European-Asian Synthetic Material Co., Ltd and Dynea.

China’s Expansion Plans from 2012 to 2015 in tonnes

Facility Location Increase in Phenol Capacity Targetted Year of Start-up
Hong Kong's Kingboard Group Yangzhou, Jiangsu 200,000                                   2012
Yanshan Petrochemical Beijing 137,500                           2012-2013
Sinopec Mitsui  Caojin, Shanghai 250,000                                   2013
Shandong Luhuayi Group Dongying, Shandong 220,000                                   2013
Taiwan Fiber Ningbo, Zhejiang 300,000                           2013-2014
Spain CEPSA Caojing, Shanghai 250,000                                   2014
Nanjing, Jiangsu 400,000                                   2014
Changchun Petrochemical Changshou, Jiangsu 200,000                                   2014
Total   1,957,500  

Jenny Yi contributed to the article.

($1 = CNY6.83)

Please visit the complete ICIS plants and projects database
For more information on Phenol, visit ICIS chemical intelligence
Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections

By: Dolly Wu
+65 6780 4359

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