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Introduction: On January 19, 2020, the National Development and Reform Commission and the Ministry of Ecology and Environment issued the "Opinions on Further Strengthening the Control of Plastic Pollution", and then issued corresponding "plastic restriction orders" across the country. Affected by this degradable plastics in 2020 "hot", many companies focus on the PBAT industry, new and proposed production capacity is a sharp increase, which will also bring development opportunities for PBAT's main raw materials BDO and adipic acid.
First, let's take a look at what biodegradable plastic is.
Degradable plastics refer to plastics whose properties and their products can meet the requirements of use, have unchanged performance during the preservation period, and can be degraded into environmentally friendly substances under natural environmental conditions after use. Therefore, it is also known as an environmentally degradable plastic.
According to the source of raw materials, plastics can be divided into petroleum-based and bio-based. According to whether it can be degraded, plastics can be divided into non-biodegradable and biodegradable.
Bio-based degradable plastics refer to degradable materials produced from natural substances. Bio-based biodegradable plastics that have been commercialized include: polylactic acid (PLA), recycled cellulose, starch plastics, polyhydroxy fatty acid ester polymers (PHAs) and the like. Among them, polylactic acid (PLA) fiber breaks through the bottleneck of lactate-propylene-polylactic acid technology and opens up the whole industrial chain of polylactic acid fiber. However, due to the defects of PLA plastic with strong texture and poor flexibility, the scope of use of PLA is limited to a certain extent.
Petroleum-based biodegradable plastics refer to degradable materials produced from petrochemical feedstocks. Petroleum-based biodegradable plastics that have been commercialized include: PBS (polybutylene glycol polysulfate), PCL (polycaprolactone), PGA (polyethanol), carbon dioxide degradable plastics (generally refers to carbon dioxide and propylene oxide ring polymer PPC), and a class of copolyesters, such as PBAT (polyadipate / butylene terephthalate), PBSA (polyadipatebic acid / butylene succinate copolymer), and PBS is a polyester biodegradable plastic. Among them, PBAT has become the mainstream material in petroleum-based biodegradable plastics, which are formed by AA (adipic acid), PTA (terephthalic acid) and BDO (1,4-butanediol), which are melted and condensed after direct esterification under the action of catalysts. The raw material consumption and energy consumption in the direct esterification process are low, and the BDO can be directly reused during the production process to reduce environmental pollution. PBAT happens to have good processability and film forming, and the actual amount of use in the market is greater than that of PLA. This is also the main reason for the "blowout" growth of PBAT's construction/proposed capacity, xiaobian has made a simple collation of PBAT's built/under construction/proposed capacity according to public information, as detailed in the table below.
Table 1 PBAT capacity statistics table of built/under construction/proposed capacity
Source: Based on publicly available information
According to incomplete statistics, at present, the domestic PBAT has a built capacity of 317,000 tons, and the construction/proposed projects have reached 5.313 million tons, and it is expected that 340,000 tons of new production capacity will be put on the market in 2021, and the total domestic production capacity will reach 667,000 tons. If all the projects under construction/proposed are put into operation, the total production capacity of PBAT in China will reach 5.63 million tons in the future. How much impact this huge production capacity will have on its main raw materials BDO and adipic acid, let's take a look at it separately.
According to the understanding of the editor, the current PBAT single consumption of raw materials is: 0.55 tons of BDO, 0.38 tons of adipic acid, 0.38 tons of PTA, the accuracy still needs to be further confirmed, welcome to correct!
<h1>BDO article</h1>
At present, the domestic BDO production capacity is 2.254 million tons, and the production capacity is mainly distributed in the northwest region, mainly because of the proximity to the raw material calcium carbide and methanol production areas. Its downstream is PTMEG, PBT, GBL, PU slurry, TPU, PBAT, etc., in 2020, the proportion of each downstream we can see through the following figure.
Figure 1 Distribution of the downstream proportion of domestic BDO in 2020
Source: Longzhong Information
As we can see from the chart above, the PBS/PBAT industry accounts for a smaller share of the downstream BDO, accounting for only about 2.3%, and according to rough estimates, the industry's consumption of BDO in 2020 is about 30,000 tons. However, through Table 1, we learned that in 2021, about 340,000 tons of production capacity will be put into operation, and the total domestic production capacity will reach 667,000 tons, according to the calculation of 0.55 tons per unit consumption, the consumption of PBAT on BDO in 2021 is expected to increase by 100,000 tons + (Note: Here considering the production time of production capacity and the actual production time concentrated in the second half of the year, rough estimate). If the proposed production capacity is fully put into operation, the most intuitive consumption for BDO will reach 3.1 million tons, which is far from enough for the current BDO production capacity supply, which will also promote the increase in new capacity of BDO, of which enterprises are mostly expanding the existing capacity, or seeking the upper and lower support of the industrial chain, self-sufficiency, as shown in Table 2.
Table 2 Statistics of domestic BDO capacity expansion plans
<h1>Adipic acid</h1>
In 2021, the domestic adipic acid production capacity is 2.88 million tons, but because the old Liaohua plant maintains a line of operation, the Haili Jiangsu plant has not been idle for a long time since the Yancheng incident, and a 75,000-ton device of Shandong Haili has been running, Hongye and Hongda have also continued to stop, Hualu Phase II has not yet been officially put into production, the output in 2020 is 1.55 million tons, and the capacity utilization rate is around 58%.
In addition to the export of adipic acid, the downstream is mainly nylon 66, PU paste, TPU, shoe sole stock solution, and the downstream proportion of changes in recent years is shown in Figure 2.
Figure 2 Change in the downstream proportion of domestic adipic acid
From Figure 2, we can see that PBAT accounts for a small proportion of the downstream adipic acid and can only be reflected in "others", and it is roughly estimated that the consumption of PBAT on adipic acid in 2020 is only about 15,000 tons. According to the PBAT production capacity of 667,000 tons in 2021, and the unit consumption of adipic acid is 0.38 tons, the consumption is estimated to increase by about 76,000 tons. If the proposed PBAT production capacity is fully put into operation, the most intuitive adipic acid consumption will reach 2.14 million tons, bringing new development to the current oversupply adipic acid industry.
In summary: the implementation of the national plastic restriction order has made the demand for PBAT soar since December 2020, and the supply of PBAT has exceeded demand, making it "imperative" for new production capacity to enter the market, and also bringing new development opportunities for BDO, adipic acid and other related raw materials.
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