Maleic Anhydride Capacity Is Serious SurplusMaleic anhydride is an important organic chemical raw material and fine chemical product mainly used in the production of unsaturated polyester resin (UPR) and alkyl resin and also in pesticide, pharmaceutical, coatings, ink, lubricant additive, papermaking chemical, textile finishing agent, food additive and surfactant sectors.Domestic capacity in surplusThe total capacity of maleic anhydride in China is more than 420 000 t/a today. There are more than 30 production units. The 45 000 t/a unit in Tianjin Zhonghe Chemical Plant is the largest production unit in China. The output of maleic anhydride in China was 236 000 tons in 2004 and reached around 280 000 tons in 2005.   Unlike the n-butane process basically used in foreign countries, the maleic anhydride production in China mostly uses the benzene process. The scale of production units is on the small side and catalysts and refining processes are also quite different from foreign countries. The average operating rate in the maleic anhydride sector in China was only around 61% in 2004 whereas the average operating rate was 75% in foreign countries and as high as over 85% in the United States and Germany.    The capacity of maleic anhydride in China is concentrated in the north and the market is already saturated. East China and South China are however the major producing areas of UPR and there is a supply shortage of maleic anhydride. If products in medium and small producers in the north are transported to the south, there would be a problem of cost. That is the reason why medium and small producers in the north mostly have a low operating rate whereas producers in the south are making good operation.    Quite a few maleic anhydride units will be constructed or expanded in near future. The 20 000 t/a unit in Lanzhou Petrochemical Co., Ltd. has already started construction. (CCR2005, No. 25) Tianjin Zhonghe Chemical Plant plans to expand the capacity to 60 000 t/a. Suzhou Synthesis Chemical Plant plans to expand the capacity to 15 000 t/a. Sichuan Luzhou plans to construct a 10 000 t/a unit. Fujian Quanzhou plans to construct a 60 000 t/a unit. Nanjing Jinling Petrochemical Co., Ltd. also plans to construct a 60 000 t/a unit. If these projects can start production on schedule, the capacity of maleic anhydride in China will be more than 500 000 t/a in 2010.Consumption distribution  in need of readjustmentThe average demand growth of maleic anhydride in China was 21.2% from 2000 to 2004. The demand was around 227 000 tons in 2004 and will reach 393 000 tons in 2010. The import amount increased sharply to 9 300 tons in 2000 and then had a gradual reduction. Import is mainly made from Taiwan province, and Malaysia, Japan and Korea come next. The consumption of maleic anhydride in China is mostly in the UPR sector and the situation will hardly have any change in near future.   (1) UPRUPR is the most important consumption sector for maleic anhydride in China. Owing to its excellent mechanical behavior, electric behavior, chemical corrosion resistance and simple processing, UPR has extensive applications. The output of UPR in China was around 800 000 tons in 2004, needing to consume around 160 000 tons of maleic anhydride. The actual output of UPR in China is expected to reach around 1.4 million tons in 2010 and the demand of maleic anhydride in UPR will be around 280 000 tons.   (2) Hydrogenated products such as BDO and THFProducts processed through the esterification and hydrogenation of maleic anhydride such as BDO (1,4-butanediol), GBL (gama-butyrolactone) and THF (tetrahydrofuran) have always been in short supply. Production units of these products in China have a small scale and the production technology is relatively outdated. The demand of these products is mainly satisfied by imports. The consumption of maleic anhydride in these products was around 8 000 tons in 2004. The demand will not have much increase in future and is expected to be around 20 000 tons in 2010.   (3) CoatingsMaleic anhydride can be used to produce alkyl resin coatings and amino resin coatings. In the 18 categories of coatings, alkyl resin coatings have the greatest consumption. The output of coatings in China was around 3.0 million tons in 2004. The output of alkyl resin coatings and amino resin coatings was around 1.0 million tons, accounting for one third of the total, and the consumption of maleic anhydride was around 16 000 tons. Alkyl resin coatings and amino resin coatings will remain to be the major varieties during the Eleventh Five-year Plan period (2006-2010). The demand of maleic anhydride in the coatings sector is expected to reach 29 000 tons in 2010.   (4) Tartaric acidTartaric acid is mainly used as food souring agent. Tartaric salts are used in mirror silvering and metal treatment, and also in leather tanning and telecommunication appliance sectors. Tartaric acid produced in China is mainly for export and the export amount accounts for more than 60% of the output. The demand of maleic anhydride in this sector was around 10 000 tons in 2004 and is expected to reach 18 000 tons in 2010.   (5) Lubricant additivesIn this sector, maleic anhydride is used only in the production of lubricant additives with ash-less dispersing agents. The demand of lubricant additives in China was around 120 000 tons in 2004, the demand of ash-less dispersing agents was around 53 000 tons and the consumption of maleic anhydride was around 3 000 tons. The demand of maleic anhydride in this sector is expected to be 5 000 tons in 2010.   (6) AgrochemicalsIn the pesticide sector, maleic anhydride is mainly used to produce insecticides including organophosphorus varieties such as malathion and pyridaphenthion and pyrethrin varieties such as tetramethrin. They are all traditional varieties without great development space. The demand of maleic anhydride in the pesticide sector was around 4 000 tons in 2004 and is expected to reach 6 000 tons in 2010 with an average annual growth of around 5%.   (7) Succinic acid and anhydrideSuccinic acid can be used to produce alkyl resin coatings, anthraquinone dyes, sulfanilamides, vitamin A, vitamin B and hemostatics. It can also be used as raw material for lubricating agents, photographic chemicals and surfactants. The output of succinic acid and succinic anhydride in China was around 3 000 tons in 2004 and the demand of maleic anhydride was around 5 000 tons. The average annual demand growth of maleic anhydride in this sector is expected to be around 3.5% from 2005 to 2010 and the demand will reach around 6 000 tons in 2010.   (8) OthersMaleic anhydride can also be used to produce tetrahydrophthalic anhydride, modified rosin and chemical assistants. The consumption of maleic anhydride in other sectors was around 25 000 tons in 2004. The demand is expected to reach 30 000 tons in 2010.     The demand of maleic anhydride in China will therefore reach around 394 000 tons in 2010.    China has more than 30 maleic anhydride producers today, but the scale of production units is on the small side. The largest single-unit capacity of both the n-butane process and the benzene process is 20 000 t/a. There are also quite a lot of production units with a capacity of 1 000 t/a. The market competitive edge is therefore rather poor.    As the capacity of domestic maleic anhydride units will be in serious surplus, in case there is no rapid development of downstream products the competition in the maleic anhydride market will be fiercer in the next few years.
Table 1  Major Maleic Anhydride Producers in China          thousand t/a
Producer