Wanhua chemical: Another 200,000 Tons, Domestic Production to Exceed 10 Million Tons!

[DT New Materials]It has been learned that recently, Wanhua Chemical Group (Penglai) High Performance Materials Co., Ltd. has announced a 220,000 tons/year SEP project.

The project adopts the use ofThe ethylene integration project at Wanhua Yantai Industrial Park produces raw materials such as styrene, butadiene, methyl methacrylate, and butyl acrylate. It employs Wanhua's independently developed, proprietary emulsion grafting - bulk SAN blending technology to manufacture ABS and ASA. Once completed, it will produce general-purpose and specialty ABS materials, totaling 200,000 tons per year of ABS and 20,000 tons per year of ASA.

Wanhua hopes to alleviate the current oversupply issue of styrene by producing ABS, the product with the highest technical content, largest volume, and best economic benefits among downstream applications of styrene. This will fully utilize the cost and resource advantages of integration and increase the added value of upstream chemicals.

Image data source: Fund Changqing

The global ABS market is currently not optimistic. In Europe, due to weak demand from downstream industries such as automotive, construction, and home appliances...Overlaying geopolitical and tariff uncertaintiesThe overall ABS market is being dragged down. The U.S. ABS market is also affected by the automotive industry, with demand 5% lower than normal levels, although sectors like construction are performing reasonably well. The Asian ABS market shows relatively stable automotive demand, with toy manufacturing providing some support, but the demand for home appliances is weakening due to seasonal production cuts and the impact of trade tariffs.

On the other hand, production capacity is still increasing. By the end of 2024, China's total ABS production capacity will reach 9.165 million tons per year, but the capacity utilization rate is only 60%.Zhejiang Petrochemical leads with an annual capacity of 1 million tons, followed by LG Yongxing (930,000 tons), Zhenjiang Chimei (850,000 tons), and Ningbo Taihua (750,000 tons). Additionally, there are Liaoning Kingfa, INEOS Styrolution, Jilin Petrochemical, LG Huizhou, Tianjin Dagu, Lijin Refining and Chemical, Hengli Petrochemical, etc.The combined production capacity of the top ten enterprises exceeds 6 million tons, accounting for 78.25% of the national total.

Since the beginning of this year, new units have been commissioned at Yulong Petrochemical, Daqing Petrochemical, Shandong Yike, Jilin Petrochemical, and others. It is expected that by the end of the year, domestic capacity will likely exceed 10 million tons!

Image data source: Fund Changqing

Multiple factors have contributed to the decline in ABS prices. The price of ABS in China has continuously dropped from $1,410/ton on January 8 to the current 9,962 yuan/ton in September, with some products falling to 9,000 yuan/ton. It is expected that in the second half of the year, product prices are likely to fall to the cost line or possibly incur losses, while the entire industry experienced an average loss of 253 yuan/ton last year and an average loss of 68 yuan/ton in 2023.

Meanwhile, the structure remains imbalanced, with general-purpose products accounting for about 80% of the ABS market and specialty products accounting for about 20%. High-end grades (such as medical-grade transparent materials and automotive weather-resistant materials) still rely on imports, necessitating the accelerated development of specialty ABS, ASA, and other such materials.Biobased ABS (biomass-derived styrene raw material) and physically recycled ABSSame varieties.

Speaking of ASAAcrylonitrile-Butadiene-Styrene CopolymerCompared to ABS(Acrylonitrile-Butadiene-Styrene Copolymer)The physical properties of structures are non-The properties are similar, but the anti-UV aging ability is greatly improved, making it a necessity in high-end fields such as new energy vehicle exteriors, photovoltaic junction boxes, outdoor building materials, 5G, and satellite communications. The market price is over 50% higher, but the polymerization cost has not increased much.

Major global ASA (Acrylonitrile Styrene Acrylate) manufacturers include BASF, INEOS Styrolution, UMG Japan, LG Chem, Kumho Petrochemical, Lotte Chemical, Sumitomo Chemical, Chimei Corporation from Taiwan, and SABIC. Earlier this year, LG Chem announced the signing of an agreement with South Korean furniture company Hanssem.The high-functional plastic ASA made from plant-based materials is used as the surface material for Hansen Kitchen Home's "e'clat" products. The world's first bio-based ASA has already been applied, and the speed is truly impressive.

In June this year, Shandong Lihuayi adopted the emulsion grafting-bulk SAN blending process technology from Technip USA, with a total investment of 2.2 billion yuan, to launch the first 100,000-ton/year ASA resin integrated production project in mainland China. With the full industry chain integration advantage of "refining-propylene/ethylbenzene-acrylonitrile/styrene/AMS-ASA," the company's ASA costs have significantly decreased. Other companies such as Shandong Yigong Material Technology, Anqiu Donghai Plastics, Zhejiang Ji'ertai, and Ruifeng Polymer are relatively smaller in scale.

Overall, the application prospects of ASA are quite promising. With giants like Wanhua Chemical, which have independent technology and raw material advantages, entering the field, it is expected to become more accessible to the general public in the future.The ASA blending methods are numerous, and the variety and models of products are extensive, resulting in significant differentiation in competition. Achieving full coverage across high, medium, and low segments, and even replacing the large ABS market, is still very challenging.