The production capacity has increased significantly, and the structural contradictions in the PC industry have intensified

Jun 10, 2022

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In mid May, polycarbonate (PC) products of Henan Pingmei Shenma polycarbonate materials Co., Ltd. entered the market. So far, China’s PC production capacity has jumped to 2.8 million tons / year, and the industry has entered an era of overall surplus. Nevertheless, the imported PC products are still maintained at more than 100000 tons per month, and structural contradictions continue to hinder the healthy and orderly development of the PC industry.

Substantial increase in capacity

According to statistics, in 2015, China’s PC production capacity was only 610000 tons, and only a few enterprises had production capacity. After 2018, the industry entered the track of rapid development, with a substantial increase in production capacity. With the commissioning of Henan Pingmei Shenma company, China’s total PC production capacity has reached 2.83 million tons / year, an increase of more than 360% over 2015.

Especially in the past six months, new PC devices have been put into operation intensively. In addition to the new installation of Pingmei Shenma PC, the 260000 T / a PC plant of Hainan Huasheng New Material Technology Co., Ltd. was put into operation in early March. In December 2021, the 260000 T / a PC plant of Sinopec was put into operation successfully, and the production capacity increased by 620000 t in half a year. From the current situation, PC capacity is saturated, the industry has entered the stage of excess, and the operating rate is about 55%.

The substantial increase in production capacity has also changed the circulation pattern of the PC industry. Previously, East China was the only one. In recent years, with the continuous production of new devices by PC manufacturers in North China, central China and southwest China, the industrial center of gravity in East China has decreased significantly, driving the PC production center to spread to all regions of the country.

In the future, there are still many enterprises planning new production capacity in the industry, such as 200000 t / a of Guangxi Huayi New Material Co., Ltd., 240000 T / a of phase I of Jilin Xingyun Chemical Co., Ltd., 260000 T / a of Longjiang chemical, etc. If these projects can be put into operation on schedule, the PC industry will have more overcapacity and more fierce market competition.

High import

In 2021, China’s PC self-sufficiency rate increased significantly, and the PC import volume also decreased for the first time. According to the data, in 2021, China’s PC import volume was 1501100 tons, 128700 tons less than that in 2020 and 97900 tons less than that in 2019.

However, China is still the largest net importer of PC in the world. In the first quarter of this year, the domestic PC import volume reached 372300 tons, the highest level in the same period in history. Excluding the export of 71100 tons, the net import volume still reached 301200 tons. In April, PC import volume was also 116000 tons. On the one hand, the domestic production capacity is released, and on the other hand, nearly half of the production capacity needs to be imported. The fundamental reason is that the structural contradictions in China’s PC industry are prominent. Most of the production capacity is seriously homogenized, and most of them are concentrated in the middle and low-end markets. Therefore, there is a large gap in high-end products, and China needs to import a lot.

With the release of China’s PC production capacity, the export volume has gradually increased. In 2021, China’s monthly PC export volume will be 25000-31000 tons, and the cumulative export volume will be 339900 tons, an increase of 88700 tons over 2020, a year-on-year increase of 35.31%, and 83300 tons over 2019, a year-on-year increase of 32.46%. However, due to the structural contradictions in the industry, it is difficult to quickly open the international market, and the export volume is difficult to grow significantly.