It is reported that the construction purpose of the carbon four new material industry chain project of Zhongjing Petrochemical is to produce BDO by using a large amount of by-product hydrogen generated from propane dehydrogenation to propylene. The product can be used to produce lithium batteries, spandex, fully degradable plastics, etc. The project, with an annual output value of more than 60 billion yuan, will be built in three phases and is scheduled to be completed and put into operation within three years. Weng Shengjin, chairman of the board of directors of Zhongjing Petrochemical, said that the carbon industry can reduce the cost of the company's carbon industry by about 2.5 billion yuan a year, with remarkable economic and social benefits.
Zhongjing Petrochemical is the world's largest biaxilated polypropylene (BOPP) manufacturer, with a total investment of 50 billion yuan in Jiangyin Development Zone, Fuqing, Fujian Province. It is the only enterprise in the world with a complete BOPP industry chain. On 28 May 2021, the first propane dehydrogenation project of Zhongjing Petrochemical in Fujian Province was officially put into operation, with a by-product of 50,000 tons of hydrogen. This byproduct hydrogen is mainly used as steam fuel. The second phase of the propane dehydrogenation unit, currently under construction, with an annual capacity of 1 million tons, will produce a larger amount of hydrogen. In order to improve the utilization rate of byproduct hydrogen, the enterprise has extended the project of "Integration of hydrogen energy Utilization and full degradation of new materials" for the production of BDO.
BDO supply and demand analysis
BDO demand analysis
The apparent domestic BDO consumption in 2021 was 1.7 million tons, with a high growth rate of BDO consumption in the past five years, with a compound growth rate of 9.7% from 2016 to 2021. Among them, the largest downstream application is PTMEG-spandex industry chain, BDO consumption structure accounted for 51.6%, mainly benefiting from PTMEG main downstream spandex production capacity is still growing rapidly; The second is PBT engineering plastics, accounting for 26.2%; The consumption of PBAT, a new downstream degradable plastic, is not yet prominent in 2021, accounting for only 2.4% of the total demand. However, in the next five years, among the downstream products of BDO, the end consumption of PBAT, GBL and PTMEG will show rapid growth, especially the explosive growth of PBAT will greatly drive the demand for BDO.
1) PTMEG-spandex
Polytetrahydrofuran (PTMEG) is a high-performance polyether polyol with major applications in spandex (polyurethane) fibers, polyurethane elastomers, copoly-ether elastomers, and other polyurethane products. Domestically, close to 90% of PTMEG is used to produce spandex, and the rest is used to produce TPU or CASE polyethers.
From 2016 to 2021, the compound growth rate of spandex demand is 7.6%, and the proportion of spandex use in fabrics still has a very large room for improvement. It is predicted that the growth rate of the industry will still be higher than the natural growth rate of chemical fiber demand in 2022-2025, and the compound growth rate is expected to maintain 7%. Domestic polyurethane demand is expected to reach 1.37 million tons by 2025. Based on the need for about 1 ton of BDO for 1 ton of spanx, spanx will drive 1.37 million tons of BDO demand by 2025.
2) GBL
The GBL-NMP industry chain is another important downstream of BDO. GBL (γ-butyrolactone) is an important fine chemical intermediate, which is widely used in lithium batteries, fine chemicals, medicine and other fields. The most important downstream of GBL is n-methyl pyrrolidone (NMP), which is used in a wide range of applications.
Most of China's NMP is produced by the GBL method, and GBL is produced with BDO as raw material. The production of 1 ton of NMP consumes about 0.9 tons of GBL, and 1 ton of GBL consumes about 1.08 tons of BDO, and the unit consumption ratio of NMP to BDO is about 1:0.97. In 2021, GBL will consume 195,000 tons of BDO. With the high prosperity of downstream lithium, GBL is expected to grow at a compound growth rate of 15% in the next five years.
3) PBAT
The increase in PBAT production will be the largest demand increment for BDO in the future. According to the domestic mainstream PBAT process route, according to the average unit consumption of PBAT to BDO of 0.5 tons, it is estimated that by 2025, the output of 2.5 million tons of PBAT will bring about 1.25 million tons of incremental demand for BDO, which will be the most important downstream application field of BDO in the future.
BDO supply analysis
BDO has had low capacity utilisation and relatively low capital expenditure over the past five years. In 2021, the total domestic BDO production capacity was 2.67 million tons, with a compound growth rate of 5.8% in the past five years, lower than the growth rate of demand. The overall operating rate of domestic BDO is low, only about 50%; From 2013 to 2020, product prices were also depressed for a long time, and enterprises could only barely maintain break-even. The downturn in the industry during this period also inhibited new capital expenditure, and there were no new installations in the industry in 2021-22, which led to a surge in BDO prices in 2021. Driven by the current strong profit stimulus and a variety of good downstream development prospects, a large number of BDO projects are planned in 2021. At present, according to incomplete statistics, by 2025, the planned capacity under construction will reach 3.9 million tons, and the total capacity will reach a staggering 6.57 million tons.
BDO raw material route development trend analysis
Production of BDO by calcium carbide method
At present, most of the existing BDO enterprises adopt the alkynyl aldehyde method, with a total capacity of 2.069 million tons, accounting for 77%; Maleic anhydride process capacity 375,000 tons, accounting for 14%; The capacity of allyl alcohol process is 230,000 tons, accounting for 8.6%. According to the announced enterprise plan in 2021, it is planned to increase BDO capacity by 3.9 million tons in the future, and the new capacity is still dominated by the alkyne aldehyde method.
