Introduction
The new material industry in mainland China is in the transition stage from self-sufficiency in low-end products to independent research and development and import substitution of high-end products; domestic high-end new material technology and production are weak, although the production capacity has been significantly increased in recent years, but it has failed to meet the domestic demand for high-end products, and the road to becoming a material power has a long way to go.
➢ One of the directions of new materials - lightweight materials. ➢ New Materials Direction 2 - Aerospace Materials.
➢ The third direction of new materials - semiconductor materials. ➢ The fourth direction of new materials - new plastics.
➢ The fifth direction of new materials - new materials for electronic and electrical capacitors. It is the key to the manufacture of thick film resistors and other electronic components, and is widely used in photovoltaic, aviation, military and other fields. It can be widely used in communications, industry, automobiles and other fields, among which MLCC, as the electronic ceramic with the largest output and demand, matches the development trend of the electronic components market and the national policy guidance.
➢ New material direction 6 - multi-purpose new materials. It is widely used in electrical machinery, IT, automobiles, military industry, etc., and the global market demand and consumption of modified polyphenylene ether are increasing year by year. The degree of industrial concentration is relatively high, and the current self-sufficiency rate of domestic para-aramid production capacity is about 20%, and the dependence on imports is serious. Superabsorbent resins (SAP) are characterized by good water absorption, affordability, and safety, and the global demand for SAP is expected to grow to 4.4 million tons by 2025. With the aging trend of the domestic population and the liberalization of the birth policy, the size of China's SAP market is expected to reach 14.51 billion yuan in 2023.
➢ New Materials Direction No. 7 - Optical and Electronic Chemicals. Widely used in electronic display, construction, automobiles, new energy, etc., the mainland has achieved domestic substitution in the field of low-end optical films. In the field of high-end optical films, mainland enterprises are seeking technological breakthroughs and industrial upgrading through endogenous and epitaxial methods. It is a cutting-edge material used in semiconductor manufacturing, PCB, and panel industries. At present, the proportion of photoresist localization in the mainland is very low, and high-end semiconductor photoresist is basically completely dependent on imports, and breaking through the overseas technology monopoly of photoresist has become a key link in the frontier research of mainland science and technology. It is a representative of the world's new generation of display technology, and is expected to become a mainstream display technology in the field of mobile phone panels. Mainland manufacturers are actively expanding production in the OLED panel industry, and the production capacity will grow rapidly in the future, and the potential demand for localized OLED materials is strong. In the field of high-value luminescent material products, the mainland has initially achieved domestic substitution, and some subdivided products have been supplied to domestic panel manufacturers in large quantities, but there is still a gap between technology and production capacity and the international leading level, and there is still a lot of room for enhancement in international competitiveness.
Continued from above
6. The fifth direction of new materials - new materials for electronic and electrical capacitors
1. Electronic paste
Electronic paste is the core and key to the manufacture of electronic components such as thick film resistors, and its quality is related to the performance of thick film components. At the same time, electronic paste is also widely used in photovoltaic, aviation, military and other fields. Among them, the positive silver paste has long-term irreplaceability for the photovoltaic industry. The overall photovoltaic industry is supported by domestic and international policies, and the new installed capacity and demand will continue to expand. The shift in production technology to TOPCon and HJT has further increased the amount of silver paste used and optimized product performance.
At present, the leading domestic electronic paste enterprises are committed to producing high-quality, cost-effective electronic paste to break through the electronic paste market monopolized by a few leading foreign enterprises, but affected by the first-mover advantage of foreign enterprises, the market share still has a lot of room for improvement. The mainland has included the photovoltaic industry in the ranks of national strategic emerging industries, and the import substitution of electronic paste is of great significance to the development of the photovoltaic industry and the optimization of the energy structure.
Electronic paste is a new type of electronic functional material integrating metallurgy, chemical industry and electronic technology, which is made of solid powder and organic solvent through three-roll rolling and homogeneous mixing, and is formed a conductive film layer with a thickness of a few microns to tens of microns on the substrate of electronic components through printing and sintering. Its process and performance are far better than traditional circuit equipment, with high power, reliable performance, flexible design, high efficiency and energy saving, etc., can cooperate with the special requirements and technological progress of electronic products such as nano and ink, and integrate and develop with organic materials.
Electronic paste is the key material of solar cells, and positive silver, back aluminum and back silver account for about 50-60% of the non-silicon cost of cells, which is the largest proportion of raw materials in addition to silicon wafers, and is also the basic material of the photovoltaic industry, which is directly related to the conversion efficiency and cost of cells. According to CPIA data, the market share of P-type PERC technology has reached 86.4%, and the mass production efficiency has exceeded 23%. The N-type cell efficiency ceiling is high, and the new technologies TOPCon and HJT have more room for mass production and upgrade of existing production lines than PERC, and the related technologies have been proven by the market. The substitution of TOPCon and HJT technologies for PERC will significantly increase the investment of silver paste, and the cost of silver paste will increase by 50 million yuan and 250 million yuan respectively, from 10%-11% of the total cost of silver paste in PERC to 16%-25% of the new technology.
In recent years, the number of enterprises producing electronic paste in mainland China has been increasing, but due to the high technical barriers of silver paste, there are still a few people who can produce paste that meets the standards of downstream industries, and the dependence on domestic imports of electronic paste is high. With the decline in the cost of photovoltaic cells, the proportion of domestic silver paste cost in the total cost of batteries has risen, and the localization of electronic paste and the realization of import substitution are of great significance to the development of the mainland electronics industry, especially to reduce the cost of the downstream photovoltaic industry and enhance the international competitiveness of mainland enterprises. In addition, electronic paste is widely used in aviation and other fields, which is convenient for the formation of circuits of various shapes, providing guarantee for electronic products to adapt to various working conditions, efficient industrial batch processing and application, and effectively reducing the assembly cost of electronic products.
According to the forecast report of solar installation demand by various research institutions around the world, the global installed photovoltaic capacity in 2020 will be about 130GW, an increase of 13% over 2019, and the new installed capacity of photovoltaic in mainland China will be about 48.2GW, an increase of 60% over 2019, accounting for 37.1% of the global installed capacity. According to the International Energy Agency (IEA), despite the impact of the pandemic, the global PV market has once again achieved significant growth, with 20 countries adding 1GW of PV capacity, and the world's top four PV installed markets have a cumulative total of about 570GW. The continued entry into force of the Paris Climate Agreement has urged the 200 countries that have signed the agreement to implement greenhouse emission reductions and promote the development of the global photovoltaic industry. India, Spain, South Korea and other countries have clarified their PV development goals for the next few decades.
According to a report released by the China Photovoltaic Industry Association, the global installed photovoltaic capacity is expected to reach 150GW~170GW in 2021, a year-on-year increase of 15.4%~30.8%. It is expected to reach 330GW by 2025, with great potential for development. In November 2020, the IEA noted in its World Energy Outlook that solar is poised to become the "new king of electricity" as prices fall.
Although the technological innovation of photovoltaic manufacturing has optimized the conversion efficiency of existing cells and reduced the consumption of silver paste per cell, the rapid development of the global photovoltaic industry and the promotion of new photovoltaic technologies will promote the continuous growth of the conductive silver paste market. At the same time, the shift to TOPCon and HJT technologies will also contribute to the increase in the use of silver pastes.
As one of the key materials to improve the conversion efficiency of solar cells, positive silver paste has a great impact on the cost of solar cells, and is a capital- and technology-intensive industry with high production technical barriers. Before 2017, Zhengyin paste was mainly monopolized by foreign companies by virtue of first-mover advantage, and four foreign-funded paste companies - DuPont (DuPont) (USA), Heraeus (Germany), Samsung SDI (South Korea) and Shuohe (Taiwan) accounted for about 90% of the global Zhengyin market. Domestic silver paste is accelerating domestic substitution, the main manufacturers are Dike shares, Suzhou Jingyin, Shanghai Kuangyu and Changzhou Juhe, the future import substitution still has a large space.
As one of the most suitable development directions in the medium term, HJT battery has high value for the preparation of low-temperature silver paste, but the consumption of a single piece is large, and the consumption of silver paste for a single cell is > 0.3g, which is more than 3 times that of sintered silver paste. The industrialization technology of low-temperature silver paste is almost exclusively monopolized by ELEX in Kyoto, Japan, with a market share of 90%. In China, Suzhou Jingyin and Changzhou Juhe have relatively mature low-temperature silver paste production technology, and the former has achieved mass production. As of June 2020, Suzhou Jingyin has achieved 686kg of low-temperature silver paste shipments, and it is expected to break the existing import monopoly pattern through industry certification in the future. Dike Co., Ltd. also began to trial produce kilogram-level low-temperature silver paste for Tongwei Co., Ltd.
The scale effect of domestic silver paste localization has begun to take shape, but the domestic market share is still not more than half. According to Huajing Information Network, the localization rate of domestic silver paste has increased from 30% in 2017 to 40% in 2019, and the space for import substitution is still relatively large, while the back aluminum and back silver have basically achieved import substitution. According to the data of Zhiyan Consulting, the overall silver paste market size in mainland China increased from 10.881 billion yuan in 2013 to 20.282 billion yuan in 2018, and the output increased from 1456.2 tons in 2013 to 4054.4 tons in 2018. The expansion of downstream demand and its ability to cooperate with the trend of high integration, intelligence, environmental protection and lightness of electronic information products will further increase its market size.
In 2019, the total proportion of the four major domestic high-temperature silver paste manufacturers was less than 35%, of which the largest proportion of Dike shares accounted for about 13%, followed by Suzhou solid technetium, which accounted for 10%. The competition in the high-temperature silver paste market is fierce, due to the cost control and technology upgrading of major domestic manufacturers, the domestic high-temperature silver paste market is developing towards import substitution, and the major domestic manufacturers are gradually replacing DuPont, Heraeus, Samsung SDI, and Shuohe Electronics, the four major international silver paste leaders. According to the "Market Survey Metallization Paste 2018" released by TAIYANG NEWS in Germany, Dike has become a major supplier of positive silver in the world, and ranks among the first echelon of positive silver paste supply with the four major international silver paste leading enterprises.
The front silver paste has a high technical threshold, integrating metal materials, inorganic materials, polymer materials, and nanoscience, and its preparation involves high-tech technical fields such as low melting point glass preparation technology, rheology, fine line printing, and high-temperature sintering. The particle size, morphology selection and the content of silver powder in the silver paste directly affect the conductivity, the selection and respective ratio of the glass oxide in the binder phase affect the softening degree, expansion coefficient and chemical stability of the positive silver paste, and the selection and ratio of organic solvent affect its volatility, thixotropy, printing speed and morphology maintenance, and the overall technology and precision requirements are high.
As silver paste companies need to constantly update and iterate their technologies to adapt to the changing trend of upstream and downstream technologies, domestic enterprises engaged in the R&D and production of electronic pastes tend to cooperate with solar cell manufacturers to develop solar cell production pastes that meet their needs to accelerate paste testing and formula improvement, expand the market and enhance their popularity. The high-speed update of the upstream and downstream puts forward higher requirements for the technology of Zhengyin enterprises. Potential entrants not only face the entry threshold of high-tech technology, but also face the R&D and production threshold bound to the existing main electronic paste and downstream enterprises, which is a double barrier.
As a key downstream application scenario for the production and marketing of electronic paste, photovoltaic silver paste accounts for 87% of the total demand for silver paste, and the output of solar cells is closely related to the production and sales of electronic paste. According to the China Photovoltaic Industry Development Roadmap (2020 Edition) released by the China Photovoltaic Industry Association (CPIA), in 2020, the domestic production of crystalline silicon cells was about 134.8GW, a year-on-year increase of 22.2%. Among them, the top five companies accounted for 53.2% of the total domestic cell production, and the top four companies produced more than 10GW. It is expected that the national cell production will exceed 152GW in 2021.
ASIACHEM expects that the output of TOPCon and HJT cells in 2021 will increase significantly compared with 2020, and the corresponding amount of TOPCon high-temperature silver paste The total market size of HJT low-temperature silver paste will reach 354.5 tons, while the overall size of China's overall photovoltaic silver paste market, including PERC positive silver, PERC back silver, TOPCon positive silver, TOPCon back silver and HJT low temperature silver paste, will reach 2636.2 tons.
With the continuous decline in installed costs, from 2009 to 2015, the global photovoltaic industry has entered a period of parity, and the new installed capacity of photovoltaic has shown a new growth trend. The National Development and Reform Commission (NDRC) and the National Energy Administration (NEA) predict that the demand for photovoltaic power generation during the 14th Five-Year Plan period will be much higher than during the 13th Five-Year Plan period. According to the "Research on China's Energy Transition and 14th Five-Year Plan", 320 million kilowatts of solar power generation will be put into operation in mainland China during the 14th Five-Year Plan, and the installed capacity of solar power generation will reach 560 million kilowatts in 2025, with distributed photovoltaic accounting for 33.3%. As of 2020, the installed solar capacity in China was 253 million kilowatts, 307 million kilowatts short of the 2025 installation target, and distributed photovoltaics accounted for 15.5%, which is also a certain gap from the 2025 target. From an international perspective, carbon neutrality, as a global consensus, promotes the increase of PV demand in various countries. Although countries have been affected to varying degrees since the COVID-19 pandemic in 2020, the financial incentives, photovoltaic auctions and other subsidy measures formulated by various countries have made the photovoltaic industry more resistant to the epidemic than expected, and showed greater demand, and the demand for the preparation of electronics-related electronic pastes has also increased, which will promote the increase of self-production and self-use and total export volume of the mainland electronic paste industry.
2. Electronic ceramics
Electronic ceramics can be widely used in communications, industry, automobiles and other fields, among which MLCC, as the electronic ceramics with the largest output and demand, matches the overall market development trend of electronic components and national policy guidance. The electronic ceramics industry is greatly affected by raw material ceramic powder, and the leading enterprises in the industry are concentrated in Japanese, South Korean and Taiwanese manufacturers. Major electronic ceramics companies in mainland China, such as Sanhuan Group and Sinocera Materials, are committed to the production and sales of the entire industrial chain to reduce the impact of upstream supply. With the popularization of 5G and new energy vehicles, the domestic and international demand for various types of electronic ceramics will continue to grow. Domestic manufacturers have been able to meet some domestic demand, but in order to meet the demand for high-end, fine electronic ceramics, domestic enterprises also need greater R&D investment. The continuous development of the MLCC industry also provides a large space for the development of the barium titanate ceramic industry in China.
Electronic ceramics are a kind of ceramic materials that use electrical, optical and porcelain properties to manufacture electronic components, which have the characteristics of high mechanical strength, high temperature and high humidity resistance, radiation resistance, wide range of dielectric constant variation, small dielectric loss, adjustable capacitance temperature coefficient, high electrical strength and insulation resistance, and excellent aging performance. Using its high-frequency or ultra-high-frequency electrical physical characteristics, electronic ceramics can be widely used in the production of fixed parts, ceramic capacitors, carbon film resistors, etc., mainly used in various electronic machines in oscillation, coupling, filtering and other sub-circuits, is an indispensable component of communications, automatic control, aviation, medical, chemical, automotive and other electronic equipment. With the development of new technologies such as laser, integration, and optics, the application scope of electronic ceramics has expanded to the wearing of mobile phones and smart watches in the field of 3C electronics, as well as the construction of 5G base stations.
Electronic ceramic materials are one of the most dynamic and promising materials in special ceramic materials, and its output value accounts for 70% of the total output value of special ceramics, which has significant social and economic benefits, especially in miniaturization and portable electronic products. As a key component of high-end reliable semiconductor devices, electronic ceramic shells can directly affect the performance and quality during the period.
China is an important global production and consumption market for electronic products, and under the impetus of the national "special action to strengthen the industrial base", the demand for electronic ceramics will expand with the expansion of the demand for various devices.
The global market size of electronic ceramics reached USD 11.99 billion in 2019, and Global Market Insight Inc. forecasts the market size of electronic ceramics to grow at a CAGR of 3.8% from 2020 to 2026 and reach USD 14 billion by 2026. The global electronic ceramics market is mainly distributed in the United States, Japan and Europe, accounting for the largest market share of 49.80% in the Japanese market.
The upstream of electronic ceramics includes suppliers of basic powder and formula powder, and the downstream is used in consumer electronics, communications, automotive industry, data transmission and other electronic products. Midstream electronic ceramic materials and their components include ceramic substrates, chip multilayer ceramic capacitor ceramics (MLCC), microwave dielectric ceramics (MWDC), etc.
Among them, the upstream raw material barium titanate (BaTiO3) or its solid solution, due to its excellent dielectric properties, resistivity, excellent insulation and other physical and chemical properties, is widely used in the production of multilayer ceramic capacitors (MLCCs), thermistors (PTCR), electro-optical devices and dynamic random access memory (FRAM). Among them, barium titanate ceramic MLCC, as the most mainstream product in the global capacitor market, is the capacitor product with the highest market share in the world due to its characteristics including high temperature and high pressure resistance, high frequency, small size, high capacitance value, etc., and its advantages in material cost and performance, accounting for 93% of the all-capacitor market in 2019. Therefore, barium titanate ceramics are called the pillars of the electronic ceramics industry.
The global MLCC market size fluctuated from 2015 to 2019, but overall it is still on an upward trend, reaching $96.3 billion in 2019. In 2018, the growth trend of 2017 was maintained, and the base of the MLCC market in 2019 was too large, affected by the sluggish demand for downstream mobile phones and automobiles, the volume and price fell together, and in 2020, affected by the COVID-19 pandemic, Murata, the main manufacturer of MLCC, stopped production several times, and the MLCC market size will continue to decline, and it is expected to gradually recover in 2021. According to the GlobeNewswire report, the global MLCC market size is expected to reach $14.36 billion by 2025. In addition, the global low-temperature co-fired ceramic (LTCC) substrate market size is expected to reach $214 million by 2027 at a compound annual growth rate (CAGR) of 7%.
The market size of electronic products in the downstream industry of electronic ceramics increased from US$420.9 billion in 2014 to US$475.8 billion in 2018. Among them, in the downstream electronic ceramic components market, the demand for automotive MLCCs reached 458.2 billion in 2019. According to the GlobeNewswire report, the global automotive electronic ceramics market size will reach $2.443 billion by 2025 at a CAGR of 3.68%.
The supply of ceramic powder in the upstream industry of electronic ceramics is mainly controlled by Japanese and American manufacturers. Japan's Sakai Chemical leads the way with 28%, followed by the U.S. Ferro with 20%. According to the purity and stoichiometric ratio of the precise chemical composition of the raw materials for the production of electronic ceramics, the diameter, distribution and shape of the particle size, and the crystalline morphology, stability, density and porosity of the structure, the upstream ceramic powder raw materials need to meet the higher requirements before they can be used to make electronic ceramics. Japan and the United States have high-quality, high-performance ceramic powder manufacturing technology, and major manufacturers account for 65% and 20% of the ceramic powder market share, respectively. The global ceramic powder market share of China's porcelain materials has reached 10%, and other manufacturers such as Sanhuan Group and Oriental Zirconium have also made breakthroughs in this field, but there is still room for improvement. The cost of electronic ceramic raw material powder accounts for about 10%-30% of the total cumulative price of electronic ceramics, so the mastery of the production process of electronic ceramic raw material powder determines the production capacity of electronic ceramic products and components to a certain extent. The market leaders of the global electronic ceramics industry are mainly distributed in Japan and the United States, and the high-end electronic ceramic powder materials are monopolized by Japanese Sakai Chemical, NCI Chemical and other enterprises.
The MLCC market is mainly dominated by manufacturers from Japan, South Korea, and Taiwan, with Japan's Murata and Samsung Electro-Mechanics occupying the first echelon of the market and mastering the core technologies of the industry. Secondly, manufacturers such as Yageo and Huaxin Technology in Taiwan, China, also have a certain first-mover advantage due to their early entry into the industry. Due to the late entry into the MLCC industry, Chinese mainland manufacturers have a certain gap in technology and scale with Japanese, South Korean and Taiwanese manufacturers, but Shenzhen Yuyang, Huafeng Hi-Tech and other representative manufacturers have been committed to MLCC technology breakthroughs in recent years to narrow the gap with international leaders. China is the main distribution of MLCC production capacity in the world, which has natural advantages such as environment and energy supply, and also plays a role in promoting the development of the mainland's own MLCC industry.
Since the start of the 50s of the 20th century, the production capacity of mainland electronic ceramics has been expanding, and the number of enterprises in the industry has increased, but compared with the electronic ceramic products of mature electronic ceramics enterprises in Japan and the United States, there is still a large gap in performance, and the import demand for high-end electronic ceramics is still more significant, and the domestic import substitution space is larger. Under the influence of the expansion and rapid growth of downstream optical fiber communications, national defense and military application scenarios, and the downstream favorable national policies, the scale of the domestic electronic ceramics market has increased from 34.66 billion yuan in 2014 to 65.77 billion yuan in 2019. It is estimated that the compound annual growth rate of 100 million yuan in the scale of the mainland electronic ceramics market will reach 114.54 billion yuan in 2023.
Continental MLCCs were first produced in 1985 by Fenghua Hi-Tech. In 2001, Sanhuan Group and Yuyang Technology began to put into production, and in 2015, Weirong Technology also joined the ranks of MLCC production, and the overall domestic MLCC market size reached 55.4 billion yuan in 2020, and the head manufacturers ranked among the top ten in the world, but the high-end and refinement of products still need to be further aligned with the future.
The preparation process of ceramic powder, which is the raw material of electronic ceramics, is a key determinant of the quality of electronic ceramic products. From the perspective of raw materials, the control of insulation, reliability and temperature stability of ceramic powder formula powder needs to be obtained through long-term experiments and accumulation analysis. From the perspective of the preparation process of electromagnetic ceramics, the simulation design of ceramic semiconductor shell, including the co-simulation design of the electrical, mechanical and thermal properties of the shell, needs to be verified by repeated experiments over time; The production process of electronic ceramics also has high technical requirements for the accumulation of product data, quality control, stable yield and output scale, which requires continuous iteration and innovation. The preparation technology of ceramic powder in mainland China is relatively backward, and the import demand is strong, mainly imported from Toso, Kyocera and Kyocera, and a few manufacturers such as Sanhuan Group have ceramic powder preparation technology, but only for their own use. Self-made ceramic powder can greatly reduce the cost of raw materials. Therefore, the R&D and production of electronic ceramics requires enterprises to have advanced R&D platforms and equipment, high requirements for the level of R&D teams, and high overall technical barriers.
The demand for high-end electronic ceramic products from downstream enterprises of electronic ceramics, the strengthening of technological blockade in some developed countries, and some international emergencies, such as the diagnosis of new crown pneumonia among employees at the Murata plant on January 6, 2021, the fire at Huaxinke's Dongguan Dalang plant on January 14, 2021, and the shutdown of work caused by the confirmed new crown epidemic among many employees of AVX's Malaysian plant on February 1, 2021, which affected the overall supply, are putting forward an urgent need for the high-end localization of products of domestic electronic ceramics enterprises.
In the downstream industry of electronic ceramics, the automotive industry is an important area for the future development of MLCC applications. According to the large difference in the demand for MLCC for different models, the demand for MLCC for pure electric vehicles is 6 times that of internal combustion engine vehicles, and it can be predicted that the demand for MLCC in the automotive field will increase greatly. At the same time, the high standards of safety performance in automobiles are also driving the development of MLCCs with higher requirements.
With the wave of 5G product replacement and the promotion of the national "new infrastructure" policy, 5G communication is another major direction for the application of electronic ceramics in mainland China. The shipment of 5G mobile phones in mainland China has reached 21.42 million units in April 2021, and the demand for MLCCs under the 5G communication standard has reached 1,000 units.
The demand for MLCCs continues to increase due to the construction of the world's leading 5G base stations and the wide application of MLCCs in various fields, and the domestic MLCC market currently accounts for about 70% of the world's total. According to customs data, in 2020, the import volume of domestic MLCCs will reach 3.08 trillion, the import amount will reach 8.116 billion US dollars, the localization rate will not reach 4%, and the market share of domestic MLCC leader Fenghua Hi-Tech will only reach 2%.
3. Polybutylene terephthalate (PBT)
Polybutylene terephthalate (PBT) is one of the five major engineering plastics, which are used in special fields of electronics, films, and spinning. Modified PBT has better performance and plays an important role in the substitution of engineering plastics for metal materials. PBT production capacity is mainly distributed in Asia, Europe and the United States, and the Middle East Saudi Arabia. The PBT industry in mainland China has a history of nearly 50 years of development, and driven by the policies of the engineering plastics and optical fiber industries, the domestic market has higher requirements for the technology and process of PBT manufacturers. Major domestic enterprises rank among the top in the global PBT industry, and their export volume is increasing year by year, but there are still some special needs of PBT demand for downstream products that need to be met through imports. Mainland PBT manufacturers also need to continue to work hard to develop hybrid modified products, break the monopoly of foreign products in high-end applications, and improve the added value and anti-risk ability of domestic products.
Polybutylene terephthalate (PBT) is a milky translucent to opaque, crystalline thermoplastic polyester made from 1.4-pbt butylene glycol and terephthalic acid (PTA) or terephthalate (DMT) esterified (or transesterified) polycondensation. PBT has excellent performance in mechanical properties, thermal properties, electrical properties, chemical properties and processing properties, and has high heat resistance, good wear resistance, high mechanical strength, flame retardancy, low water absorption of 0.1%, strong electrical insulation in humid environments, and the ability to crystallize quickly at low temperatures.
As an engineering material with excellent performance, modified PBT plastic refers to the addition of small molecule inorganic or organic substances to polymers (resins) through physical or chemical action, so as to give it a certain property (machining performance) or improve its certain properties, such as toughening, strengthening, plasticizing, flame retardant, etc., mainly used in automobiles, electronic appliances, industrial machinery and polymer alloys, blending industries. For example, in the automotive field, as a distributor, car body parts, igniter coil skeleton, insulation cover, exhaust system parts, motorcycle ignition in automobiles, in the electronic and electrical industry, such as TV deflection coils, picture tubes and potentiometer brackets, sound output transformer skeletons, adapter skeletons, switch connectors, electric fans, refrigerators, washing machine motor end covers, shaft sleeves, etc. Due to its excellent physical and chemical properties, PBT is an ideal material for special applications in the field of electronics, and the modified PBT has better performance and plays an important role in electronic connectors, which has been valued by many countries.
According to Zhiyan Data Center, from 2014 to 2019, the global PBT market size rose from US$2.698 billion to US$3.549 billion. Before 2017, the PBT market rose relatively modestly, and the growth rate accelerated from 2018 to 2019. In 2019, the global PBT production capacity was about 2.48 million tons, mainly concentrated in Asia, Europe, the United States and the Middle East. Among them, the production capacity in Europe and the United States is about 580,000 tons, accounting for 23%, mainly concentrated in the United States, Germany and the Netherlands; the production capacity in the Middle East is mainly contributed by Saudi International Petrochemical, with a production capacity of 63,000 tons, accounting for 2.5%; the production capacity in Asia is 1.842 million tons, accounting for 74.5%, mainly concentrated in Chinese mainland, Taiwan, Japan and other places, of which the production capacity of Chinese mainland is 1.3 million tons, accounting for 71% of the production capacity in Asia, and the total global production capacity is about 54%.
The upstream raw materials of PBT are mainly PTA and BDO, and the downstream application fields include electronic appliances, automobiles, machinery and equipment, etc., and the main consumer fields in developed countries or regions such as the United States, Japan and Europe are automobiles, electronic appliances, etc. In Asia except Japan, PBT does not account for a high proportion in the automotive field, and the electronic and electrical sector is the largest consumer market for PBT.
According to StrategyR's forecast, the global PBT market size is expected to recover to 1.6 million tons by 2027, of which the PBT market size for the automotive field is expected to reach 648,200 tons, and the PBT market size for the electronic and electrical industry is expected to reach 355,000 tons.
At present, the world's major PBT manufacturers are mainly distributed in China, Europe, America, Japan, and Saudi Arabia in the Middle East, with a production capacity of 200,000 tons in Xinjiang, Kanghui Petrochemical, Changchun Chemical and Wuxi Xingsheng with a production capacity of 180,000 tons, a production capacity of 120,000 tons of Sabor Basic Innovative Plastics in the United States, and a production capacity of 100,000 tons in DuPont, BASF in Germany, and Kaixiang Chemical in China. At the same time, there are also a small number of producers in Malaysia, such as Toray BASF's Malaysian plant.
The PBT industry in Continental grew in 1973 and was initially produced in the DMT process, but was discontinued due to its inherent defects. By 2006, the mainland PBT achieved domestic industrial production, but due to the shortage of raw materials, the price of PBT produced is high, mainly relying on imports, and the mainland's self-produced and self-sufficient PBT enterprises have weak R&D capabilities, mainly concentrated in the development of low-end products, and the industrial concentration is low. Later, with the rapid development of the downstream electronics and automotive industries, the demand for PBT market continued to expand. After 2013, the downstream demand of the PBT industry in mainland China has increased significantly, the new production capacity of PBT has increased, the balance between supply and demand in the market has been broken, the overall oversupply has been oversupply, the sales price of PBT resin has decreased year by year, and the overall gross profit margin of the industry has shown a downward trend. Since then, PBT manufacturers have sought to reduce costs, improve product quality to enhance product competitiveness, and strengthen the R&D and production of modified products to increase the added value of products. At the same time, leading domestic companies began to increase their efforts to enter the international market.
At present, the PBT market in mainland China is dominated by competition between large foreign brands and domestic local brands. According to the scale and technology, it is divided into three levels: the first level is for large foreign enterprises, such as BASF, DSM, DuPont, Shabic, Mitsubishi Chemical, Toray and other leading manufacturers in the global market, relying on scale and technological advantages to deliver high-end PBT products to China; Jiangsu and Shili, etc., these domestic enterprises have large production capacity, high product quality, stable customer groups, accounting for a high share of the domestic high-end market, all have strong competitiveness; the third level is the domestic small and medium-sized PBT production enterprises, these enterprises develop small scale, technology, financial strength is still insufficient, mainly concentrated in the field of low-end products, market competitiveness is weak.
In 2019, the output of PBT in mainland China reached 722,000 tons, a year-on-year increase of 15.9%, and the market size of PBT resin products reached 928,600 tons, a year-on-year increase of 25.7%. The overall output of PBT and the market size of products maintained an upward trend.
The PBT industry is technology-intensive, with high initial and maintenance costs in the production process. The most suitable processing method is injection molding, and it can also be processed by other methods such as blow molding, coating, extrusion, etc. The three major conditions of injection molding are suitable barrel temperature, mold temperature and injection pressure, all of which have high requirements for manufacturers' production technology and processes. Enterprises that produce PBT need to have strong technical strength and reserves in order to continuously develop new technologies, new products and new processes to meet market requirements. However, the PBT industry has a high "product stickiness", and unless other companies can provide an overwhelming advantage, manufacturers generally will not easily change their cooperative customers. In addition, the market demand for PBT is limited, the economies of scale are not obvious, and the current demand has basically been digested by the existing enterprises in the market, which has a high threshold for new manufacturers.
The demand for PBT in China fluctuated from 2012 to 2019, but began to rise from 2017 to 2019, rising from 392,000 tons in 2017 to 674,000 tons in 2019, an increase of 30.8% in 2019 compared to 2017.
The reason for this is the continuous adjustment of consumption upgrading and policies, and the expansion of the application field of PBT products, the continuous development of automobile manufacturing, electronic appliances, optical cables and other industries, and the overall demand for PBT products expands. At present, the application fields of PBT products in mainland China are mainly divided into electronic appliances, automotive machinery parts manufacturing, fiber, optical fiber and cable sheath, film and other industries. With the gradual deepening of the national triple play integration and telecom transformation, as well as the popularization of 5G, the demand for optical fiber and cable by major communication operators has increased, the demand for optical fiber and cable has increased rapidly year by year, and the demand for PBT in optical cable sheath has also grown rapidly. In the field of spinning, many enterprises have opened new polymerization devices one after another, and the increase in spinning supply has promoted the development of the PBT spinning market and the improvement of spinning technology, and the demand in the spinning field will continue to increase in the future, which will become the main factor driving the rapid development of PBT demand.
According to the General Administration of Customs, China's PBT exports are growing rapidly, while the growth rate of imports is relatively flat and does not fluctuate much. PBT exports reached 251,000 tonnes in 2019, an increase of 188.5% from 87,000 tonnes in 2012. In 2019, the total demand for PBT in mainland China was 674,000 tons, and the import volume was 203,000 tons, with a localization rate of about 70%. Since 2014, mainland PBT products have achieved a trade surplus, and the industry is relatively mature. Domestic large, medium and small PBT manufacturers can basically meet the demand for low-end products, so exports have increased, and due to the high-end demand for domestic PBT downstream products, downstream users have gradually increased their quality requirements for raw materials, and have special requirements for the nature of products Exports are gradually surpassing imports.
7
The sixth direction of new materials - multi-purpose new materials
1. Polyphenylene ether (PPO)
As one of the world's five general projects, polyphenylene ether resin has excellent properties such as high heat resistance, high electrical performance, acid and alkali resistance, and is widely used in electronic and electrical and household appliances, office automation machinery, IT, automobiles, aviation and military industries.
On the whole, the global market demand and consumption of modified polyphenylene ether are increasing year by year. With the vigorous development of 5G communications, new energy vehicles and home appliance industries, as well as the wide application of modified polyphenylene ether in the above industries, it is expected that its demand will continue to grow and has good market development potential. There is a significant gap between the domestic polyphenylene ether industry and developed countries in Europe and the United States in terms of quality, output, variety and brand, and there is still a large space for development.
Polyphenylene ether resin (PPO) is a thermoplastic engineering plastic with excellent performance and is one of the world's five general engineering plastics. PPO is non-toxic, transparent, has low relative density, excellent mechanical strength, stress relaxation resistance, creep resistance, heat resistance, chemical corrosion resistance, and has a wide range of uses in electronic and electrical and household appliances, office automation machinery, IT, automobiles, aviation and military industries. However, due to its poor oxidation resistance, poor processing and formability, and high cost, the application has been greatly limited. In order to overcome these shortcomings, most of the downstream industries of global polyphenylene ether use modified polyphenylene ether, or MPPO for short. With many characteristics superior to PPO, MPPO has opened up many new application fields such as ultra-high frequency electronic components, photovoltaic panels, printed circuit boards, lithium-ion batteries, 5G radomes, etc., and has become an important material for 5G communications, new energy vehicles, integrated circuit chips and other national strategic emerging industries.
Due to the high technical barriers to the production of polyphenylene ether raw powder, only a few enterprises in Saudi Arabia, Japan and other regions have production, and the production capacity is relatively small, resulting in a situation where polyphenylene ether is in short supply in the international market. According to the report of Sinochem New Materials Research Institute, the global polyphenylene ether market size was 11.663 billion yuan in 2015 and 16.115 billion yuan in 2019, an increase of 7.33% year-on-year in 2018, reaching 20 billion yuan in 2020. With the vigorous development of the global power equipment and new energy industry, the automotive industry and the home appliance industry, the global market demand for polyphenylene ether will also grow rapidly. According to QYResearch, the global polyphenylene ether market size will reach $1.303 billion in 2027, with a compound annual growth rate (CAGR) of 2.4% (2021-2027), and there is still good growth potential in the future.
Different from other general-purpose engineering plastics, the production of PPO and MPPO is highly concentrated, and the current production of the world's polyphenylene ether industry is concentrated in a few companies in developed countries. Currently, SABIC (which acquired GE's engineering plastics business) is the world's largest producer of polyphenylene ether, with an annual production capacity of about 135,000 mt/year, accounting for about 46.6% of the world market. In addition, companies such as Asahi Kasei of Japan and Mitsubishi Gas Chemical Corporation of Japan also occupy an important position in the global polyphenylene ether production market. At present, the main domestic polyphenylene ether manufacturers are Bluestar Group, Nantong Xingchen Synthetic Materials Co., Ltd. and Xinbao New Material Technology Co., Ltd.
Regionally, the production of polyphenylene ether is mainly distributed in the United States, Asia and Europe. According to the data of new chemical materials, from the perspective of the regional proportion of global polyphenylene ether production capacity, the largest proportion of polyphenylene ether production capacity is the United States, reaching 37%, followed by Asia, accounting for 32%.
At present, the mainland has mastered the production technology of modified polyphenylene ether and has also realized the large-scale production of modified polyphenylene ether, with domestic production capacity accounting for about 20.6% of the global production capacity. According to the announcement on the company's official website, China Bluestar currently has an annual production capacity of 50,000 tons of polyphenylene ether resin, ranking among the top in the world, and is also the only polyphenylene ether resin manufacturer in the world that has mastered the two process technologies of homogeneous solution polycondensation and precipitation polycondensation. In recent years, a variety of PPO alloy products with special functions have been continuously developed. However, there is a significant gap between the mainland MPPO and the developed countries in Europe and the United States in terms of quality, output, variety and grade, and there is still a large space for development in the domestic polyphenylene ether industry.
In addition, with the vigorous development of the mainland's automobile industry, electronics industry, household appliances and office equipment, the domestic market of polyphenylene ether is in short supply, and the degree of import dependence is high. According to the data of Hangzhou Xianluo Investment Consulting, the market demand for polyphenylene ether in mainland China in 2019 was about 140,200 tons, while the supply in the domestic market was only 45,900 tons, facing a large supply and demand gap. With the proposal of automobile lightweight and dual carbon goals, the advantages of PPO materials have been further highlighted, and the domestic demand for polyphenylene ether and modified polyphenylene ether will further rise. In addition to expanding the production scale of MPPO, it is also urgent to accelerate the research and development of MPPO compatibility technology, blending technology and processing and molding technology, so that MPPO can be serialized and high-performance in terms of varieties and grades, actively explore the market, and meet the development needs of various industrial sectors in the mainland.
2. Para-aramid
As one of the world's three major high-performance fibers, para-aramid has excellent properties such as chemical corrosion resistance, high strength, high modulus, and flame retardant, and is widely used in downstream fields such as aerospace composite materials, rail transit reinforced materials, bulletproof and protective safety materials, and automotive rubber in the global market, with a large market demand. Due to the high technical barriers, long R&D cycle and high investment threshold of aramid materials, the world's aramid industry has a high degree of concentration. According to the research report released by Limu Information Consulting, the current self-sufficiency rate of domestic para-aramid production capacity is about 20%, and the dependence on imports is serious. In recent years, with the increasing uncertainty of the global trade environment, applications such as national defense and military industry and communications have been subject to more restrictions, and the demand for domestic substitution is urgent. Taihe New Materials is the first enterprise in China to realize the industrial production of para-aramid, with a production capacity of 4500t of para-aramid, ranking fourth in the world and first in China. Since the beginning of this year, the volume and price of para-aramid have risen, and the aramid leader will enter a performance release period.
Para-aramid, also known as aramid-II and aramid 1414, has excellent properties such as chemical corrosion resistance, high strength, high modulus, and flame retardant. Its strength is 3 times that of steel, 4 times that of polyester industrial yarn, and its initial modulus is 4-10 times that of polyester industrial yarn and more than 10 times that of polyamide fiber. Para-aramid has high stability, zero shrinkage at 150°C, and can still maintain 65% of the original strength at 260°C. Its application fields mainly include protective clothing (mainly bulletproof equipment), aerospace, automotive industry, fiber optic cable reinforcement, etc.
Para-aramid was first successfully developed by DuPont in the United States and began industrial production in 1972. Subsequently, countries such as the Netherlands, Japan, South Korea and Russia also started their own research work. At present, many countries around the world have realized the large-scale production of para-aramid. According to the statistics of New Materials Online, the global production of para-aramid in 2018 was about 82,000 tons, and the global downstream consumption of para-aramid in 2018 was about 80,000 tons. Global production capacity for para-aramid products will continue to increase over the next five years, with Teijin's plant in the Netherlands already announcing an expansion of para-aramid capacity. According to the announcements of various companies, in the next 5~10 years, Yantai Taihe, Zhonglan Chenguang, Yizheng Chemical Fiber, Shenma Group and other enterprises, Jiangsu Ruisheng New Material Technology Co., Ltd., a subsidiary of Sinochem International, have capacity expansion plans, such as Yantai Taihe New Materials announced the development plan of 12,000 tons of para-aramid.
As one of the world's three major high-performance fibers, para-aramid is widely used in downstream fields such as aerospace composite materials, rail transit reinforcement materials, bulletproof protective safety materials, and automotive rubber in the global market, with a large market demand. However, the application of aramid fiber in the domestic market is narrow, and it is still in relatively low-end fields such as optical fiber, rope and rubber reinforcement. The main reason is that domestic technology lags behind overseas enterprises and is still in the development stage in the field of high-end protection, so para-aramid is also one of the new materials that the mainland has focused on developing for a long time. With the vigorous development of the aerospace and rail transit industries in the mainland, the high-end of automobiles has become a trend, and the demand for para-aramid in these fields will continue to grow steadily. According to the forecast of the New Thinking Industry Research Institute, the domestic demand for aramid is expected to reach 25,000 tons in 2025, and the global demand for para-aramid will reach 150,000 tons in 2025.
Due to the high technical barriers, long R&D cycle, and high investment threshold, the world's aramid industry is highly concentrated, and the global aramid industry is almost monopolized by four companies: DuPont of the United States, Teijin of Japan, Taihe New Materials of China, and Kolon of South Korea. According to the statistics of QYResearch, the current international para-aramid production capacity is about 95,000 tons, and the production capacity of DuPont of the United States and Teijin of Japan accounts for about 80% of the total global production capacity, with a production capacity of 36,000 tons/year and 32,000 tons/year respectively, which is in a monopoly position in the world. Taihe New Materials has a para-aramid production capacity of 4500t, ranking fourth in the world and first in China.
Aramid has extremely high technical barriers, and carbon fiber and polyimide film (PI film) are known as the three major bottleneck key polymer materials restricting the development of high-tech industries in the mainland. In the early stage, the mainland did not have a good solution to the key equipment processing and manufacturing technology of para-aramid, resulting in the localization process of para-aramid in the mainland is relatively slow, the product is unstable, the yield rate is not high, the mainland's para-aramid production capacity is still at the thousand-ton level, and only Taihe New Materials Zhongchen blue light and Yizheng chemical fiber have realized the large-scale production of para-aramid.
According to the relevant data of the Prospective Industry Research Institute, the mainland's para-aramid import dependence in 2020 was about 87%, and the demand for import substitution was urgent. On the one hand, the increasingly stringent environmental protection requirements in China have led to a tight supply of raw materials for domestic para-aramid production, on the other hand, from the import side, the U.S. military has started to change the equipment of individual weapons such as color uniforms, helmets, and combat boots to make the demand for para-aramid in the United States rise sharply, and DuPont, as the main importer of para-aramid in China, has given priority to ensuring the supply of the United States, resulting in an increase in the domestic supply gap. According to the relevant research report data of Shenwan Hongyuan, from 2017 to 2018, the average price of para-aramid products increased from about 155,000 yuan/ton to 235,000 yuan/ton, an increase of 51.6% year-on-year. In 2019, domestic para-aramid prices tended to be stable, with the average price fluctuating between 220,000-240,000 yuan/ton.
Since the "13th Five-Year Plan", the para-aramid industry in mainland China has developed rapidly and achieved gratifying results. On the one hand, it broke the technical monopoly of foreign para-aramid and filled the gap in domestic production. On the other hand, from 2019 to 2020, the para-aramid production capacity planned by Taihe New Materials, Yizheng Chemical Fiber, Ruisheng New Materials and other enterprises has entered the acceptance and production period one after another, and the domestic para-aramid production capacity continues to expand, and the localization rate is expected to continue to increase in the future. In the next 5~10 years, with the improvement of para-aramid performance in the mainland, the continued enrichment of product specifications, and the high-quality development of downstream manufacturing and application fields, the advantages of para-aramid production scale will be further highlighted, and its demand will continue to rise. According to the forecast of Leading Industry Research Institute, the market demand growth rate of para-aramid will remain at about 10% from 2021 to 2025, and the demand for para-aramid in mainland China will reach 20,000t in 2025.
At present, domestic manufacturers with para-aramid production capacity and stable production mainly include Yantai Taihe New Materials Co., Ltd., Sinochem International Group Co., Ltd., Yizheng Chemical Fiber Co., Ltd. and Zhonglan Chenguang Chemical Research Institute Co., Ltd.
Among them, Taihe New Materials and Sinochem International are listed companies. Taihe New Materials is the first enterprise in China to realize the industrial production of para-aramid, with an annual production capacity of 4,500 tons. According to the data published on the company's official website, its annual production capacity is expected to expand to 6,000 tons by the end of 2021, and will be expanded to 12,000 tons per year during the 14th Five-Year Plan period. Sinochem International's 5,000-ton aramid project is now in the production and commissioning stage, and if the production capacity is fully released, it is expected to become the first domestic and the world's third largest para-aramid producer and supplier with independent intellectual property rights. In the context of the imminent increase in aramid demand, the timely launch of new production capacity will help domestic enterprises break through the bottleneck of production capacity and achieve performance growth. In fact, since the beginning of this year, the volume and price of para-aramid have risen, and the profitability of leading enterprises has increased significantly.
Other related unlisted companies: Sinochem International acquired the 500t para-aramid production line of Suzhou Zhaoda Special Fiber Technology Co., Ltd., which has the production capacity of para-aramid. At present, Jiangsu Sinochem Zhaoda High Performance Materials Co., Ltd. is preparing to build a 10,000 t para-aramid production unit in Yangzhou Chemical Industry Park. Relying on its own integrated innovation advantages in the field of chemical fibers, China Pingmei Shenma Group began to research and develop the polymerization spinning and industrialization technology of para-aramid in 2005, and built a production line with an annual output of 500t para-aramid. In 2018, it was announced that the continuous operation of the 1000t unit had been realized, and the key technology of para-aramid production had been mastered, and the conditions for large-scale industrial production were met.
3. Super absorbent resin (SAP)
Super absorbent resin (SAP) has the characteristics of good water absorption, moderate price and good safety, and is widely used in downstream industries such as infant diapers, feminine hygiene products, adult incontinence products, and agricultural water retention agents. In 2020, the global SAP production capacity was about 5 million tons, and the consumption was about 3.4 million tons, and the global SAP demand is expected to grow to 4.4 million tons in 2025. With the aging trend of the domestic population and the two-child policy, the domestic SAP demand will continue to rise in the future, and the size of China's SAP market is expected to reach 14.51 billion yuan in 2023. The raw material barriers and customer barriers in the superabsorbent resin industry are high, and the leading enterprises with scale advantages and advantages of the whole upstream and downstream industry chain (such as Wanhua Chemical and Satellite Petrochemical) will be strong and strong, and their performance is expected to be further improved.
Superabsorbent resin (SAP) is a low-crosslinking polymer compound with strong hydrophilic groups, which has strong water absorption, stability, water retention, and is safe and non-toxic. The water absorption of superabsorbent resin can reach hundreds of times of its own mass, the water absorption speed is fast, and the water retention is strong, even under the conditions of heat and pressure, it is not easy to lose water, and is widely used in diapers, sanitary napkins, desiccant, deoxidation preservatives, medical materials, agriculture and forestry drought resistance and water retention, sand prevention and water control and other fields.
According to the 2020 China Petroleum and Chemical Bulk Products Annual Report, 70.0% of the downstream consumption of superabsorbent resins (SAP) is used in the production of baby diapers/pants, 17.0% in the production of adult incontinence products, 9.0% in the production of feminine hygiene products, and 4.0% in other fields such as industry and agricultural water retention agents.
The development of superabsorbent resins began in 1961 with superabsorbent polymers made by the U.S. Department of Agriculture Research Institute, and in 1978, Japan's Sanyo Chemical Co., Ltd. pioneered the use of disposable diapers, opening the way to industrial production of SAP. Since then, experts from various countries have successively developed SAP products, which have been successively applied to agriculture, forestry and horticulture, physiological hygiene, food, civil engineering and construction, daily chemical industry and other industries, and the SAP industry has developed rapidly.
According to the statistics of the Chemical Data Center of the China Petroleum and Chemical Industry Federation, the global SAP production capacity in 2020 was about 5 million tons, mainly distributed in Europe, Japan, China and other countries and regions, and the global SAP consumption was about 3.4 million tons. In the downstream consumption of SAP, the production of baby diapers/pants accounted for 70.0% of the total consumption, and the production of adult incontinence products accounted for 17.0% of the total consumption. With the gradual aging of the world's population and the introduction of policies to encourage childbirth, the potential demand for infant diapers and adult incontinence products will grow rapidly, thereby driving the further expansion of the SAP market. According to Zhiyan Consulting's forecast, global SAP consumption is expected to grow to 4.4 million tons in 2025.
The three major producers of superabsorbent resin in the world are Shoka of Japan, BASF of Germany and Evonik of Germany, with a production capacity of more than 600,000 t/a, making them the first echelon of global superabsorbent resin manufacturers. Sumitomo, Sansanya, LG Chem, Yixing Dansen, Formosa Plastics and other manufacturers have a total production capacity of more than 200,000 t/a, making them the second echelon of superabsorbent resin manufacturers in the world. According to the statistics of Limu Information Consulting, the production capacity of the world's top 5 SAP enterprises accounted for 64.5% of the total production capacity in 2020. Among them, Japan's catalyst production capacity ranks first in the world, accounting for 17.4% of the total production capacity, Germany's BASF is second, accounting for 14.5%, Germany's Evonik ranks third, accounting for 13.1%, and the rest of Sumitomo Seika and Japan's Sanya account for 10.9% and 8.6% respectively. From a global perspective, the production pattern of the SAP industry is relatively stable, and the concentration of production capacity is high.
The development of the domestic superabsorbent resin industry has generally experienced three stages: start-up, steady development and large-scale growth. The development and application of superabsorbent resins in China began in the 70s of the 20th century, and initially focused on the research and development of practical agricultural water-retaining agents, and the development scale and application scope were small. After half a century of development, the mainland has become the country with the most sufficient SAP production capacity in the world, and domestic commercial SAP has also been widely used.
Thanks to the vigorous development of the domestic SAP industry and the expansion of downstream application fields, the market size of the domestic SAP industry has grown steadily in recent years. According to the research report of Zhiyan Data Research Center, in 2014, the market size of the SAP industry in mainland China was only 5.95 billion yuan, with a production capacity of only 828,000 tons, and in 2018, the domestic SAP market size increased to 9.011 billion yuan, and the production capacity has reached 1.305 million tons. According to the data of the market research network, the domestic SAP production capacity in 2020 will be about 1.5 million tons, and the output will be about 1 million tons. According to statistics from the General Administration of Customs, in 2018, China's SAP exports reached 200,000 tons, twice that of imports, and it has become a net exporter from a net importer.
Although the production capacity and scale continue to grow, there is still a lot of room for development in the domestic SAP industry. First, China's SAP industry lacks high-end products, and the market is monopolized by foreign-funded enterprises such as Japanese Catalyst. Second, domestic low-end overcapacity occupies a dominant position, and product homogeneity is serious. Except for the leading enterprises such as Satellite Petrochemical and Wanxing Chemical, which have medium and high-end production capacity, the products of the rest of the enterprises are seriously homogeneous and the bargaining power of the industry is poor. Third, there is a clear gap between the technical level and the international giants.
The domestic SAP production has not yet reached the level of batch application automatic production line, with poor product stability, high production energy consumption and short continuous production cycle. In addition, according to the relevant data of the General Administration of Customs, domestic imports of SAP mainly come from South Korea, Taiwan, Japan and other countries or regions, and are mostly used in the production of hygiene products with strict standards, and are mainly exported to India, Indonesia, Vietnam and other countries or regions, and the products are relatively low-end. Domestic enterprises urgently need to optimize production processes, expand downstream high-end products, and improve core competitiveness.
From the demand side, with the acceleration of the aging of the mainland population, the demand for adult diapers will rise sharply, and the gradual liberalization of the national two-child policy will also promote the expansion of baby diaper consumption. In addition, with the support of export tax policies, cost-effective domestic SAP products are expected to expand exports to emerging markets such as India, South America, and the Middle East. In summary, it is expected that the demand for SAP in China will continue to grow in the future. According to the forecast of the Toubao Research Institute, the size of China's superabsorbent resin market will reach 11.99 billion yuan in 2021 and 14.51 billion yuan in 2023, with a compound annual growth rate of 10.0%. In the future, SAP production capacity will develop towards high performance, compounding, functionalization, and biodegradation.
The raw material barriers and customer barriers in the superabsorbent resin industry are high, and new entrants cannot gain competitive advantages.
Selected report source: Yinchuang Think Tank
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