Development Goals of China's Chlor-Alkali Industry in the Next Five Years   

China Chlor-Alkali Industry Association announces the outlines for the 12th Five-Year Plan (2011 - 2015) of China's chlor-alkali industry.

1. Output
By 2015, China's annual caustic soda output will reach 28 million tons, having annual growth rate of 7% from 2011 to 2015; and the annual PVC output will reach 15 million tons, annually growing 8% during the period. The chlor-alkali industry will strive to balance the output ratio of caustic soda and PVC and to increase the proportion of organic chlorine products to meet the market demand.

2. Technological progress
During the period, China will encourage uses of domestic ion-exchange membrane technology and promote the application of anode and modified diaphragm technology, new energy-efficient rectifiers, evaporators, high pressure chlorine compressors, oxychlorination-based PVC facilities as well as large domestic PVC polymerization process and technology packages to improve the safety and environmental protection conditions and produce quality products.

3. Energy saving and emission reduction
From 2011 to 2015, China will phase out the metal anode diaphragm process. The chlor-alkali industry will actively promote the cleaning production program. By 2015, it will reduce the total COD emissions of caustic soda and PVC plants by 15% and lower the unit comprehensive energy consumption of caustic soda by 7%. The calcium carbide process-based PVC production nationwide must use low-mercury catalysts. By 2015, the mercury consumption per ton of PVC will decrease by 50%.

4. Cut down number of players and form competitive groups
China encourages mergers and acquisitions activities to reduce the number of enterprises and set up competitive groups, improves the industrial concentration and efficiency to enhance the market competitiveness of the chlor-alkali industry.

Review of China's chlor-alkali industry in the previous five years

1. Capacity was in oversupply
As of 2010, there were 176 caustic soda (NaOH) producers in China, having a total production capacity of 30.21 million t/a and a total annual output of 20.87 million tons, increasing by 105.4% and 68.3% compared to 2005, respectively. The capacity is mainly distributed in Shandong, Jiangsu, Henan, Inner Mongolia, Xinjiang and Zhejiang provinces and regions, accounting for 59.4% of the national total capacity. By 2010, the number of large caustic soda producers (each with a capacity of more than 400 000 t/a) had increased to 15, accounting for 25.6% of the total capacity, and the industrial concentration had further increased. There are two main caustic soda production processes: the ion-exchange membrane process, and the diaphragm process. The ion-exchange membrane process has developed rapidly over recent years with its lower energy consumption, advanced production technology and cleaner production. By 2010, its proportion in the total capacity had increased to 84.3%.
   By the end of 2010, there had been 94 PVC (polyvinyl chloride) producers in China, having a total capacity of 20.43 million t/a and a total annual output of 11.3 million tons, increasing by 110.1% and 69.9% compared to 2005, respectively. The PVC capacity is mainly distributed in Shandong, Inner Mongolia, Henan, Tianjin and Xinjiang provinces and regions. By 2010, the number of large PVC producers (each with a capacity of more than 400 000 t/a) had increased to 17, accounting for 45.8% of the total capacity. There are two main PVC production processes: the calcium carbide process and the ethylene process. The calcium carbide process has developed rapidly in recent years. The vast majority of new and expansion PVC projects adopt the calcium carbide process. In 2010, the calcium carbide process accounted for 80.9% of the total capacity.
   In recent two years, the capacity expansion of China's chlor-alkali industry was too fast. In 2010, the overall operating rate was about 70% for caustic soda producers and only about 55% for PVC producers.

2. Layout: Northwest China became a key production base
From 2011 to 2015, northwestern regions in China, including Inner Mongolia and Xinjiang, became important chlor-alkali production bases. The share of Inner Mongolia in the national total caustic soda capacity increased from 1.8% in 2005 to 8% in 2010, and the share of Xinjiang climbed from 4.1% in 2005 to 13.4% in 2010. But the high logistics cost from northwest to southeast has become a major bottleneck restricting the development of the chlor-alkali industry in Northwest China.

3. Demand is basically stable
The demand for caustic soda remained stable in the Chinese market, coming from light industry and chemical, textile and metallurgical industries. The downstream demand for PVC had some changes. Pulled by the domestic housing construction and industrial construction, the demand for PVC pipes, pipe fittings, profiles as well as doors and windows has increased dramatically in China. The demand for hard PVC goods kept growing, while that for soft goods kept decreasing. Major PVC consumer areas in China remained eastern and southern regions.

4. Raw materials structure had some changes
Driven by the rapid development of caustic soda and soda ash sectors, the crude salt production structure has also presented some changes: sea salt production has grown slowly, while the production of mineral salt and lake salt has kept growing. Affected by energy, resources and logistics, a few large-scale calcium carbide production bases have formed in China's central and western regions, where there are abundant coal resources and electricity, and calcium carbide process-based PVC producers in these regions have cost advantages compared with those in the eastern region. Major raw materials of ethylene process-based PVC include ethylene, dichloroethane and vinyl chloride, which rely heavily on imports, so the production of ethylene process-based PVC in China is mainly concentrated in the eastern region.

5. Exports of caustic soda and PVC increased, while imports decreased
The exports of caustic soda and PVC have begun to increase, while their imports have gradually decreased. Liquid caustic soda has been exported to the USA, Australia, Canada and other countries; solid caustic soda has mainly been exported to Southeast Asia and Africa; and PVC has been mainly exported to Russia, India, Egypt, the CIS countries.

6. Innovation ability has kept improving
During the Eleventh Five-Year Plan period (2011-2015), innovation ability for domestic chlor-alkali players have kept improving. Bluestar (Beijing) Chemical Machinery Co Ltd developed the ion-exchange membrane electrolyzer with a natural circular membrane interpolar gap and applied the technology into caustic soda producers. Shandong Dongyue Chemical Co Ltd has developed the full set of ion-exchange membrane production technology ranging from raw material resins to ion-exchange membrane industrial products and begun to promote its technology. Chinese companies have developed ceramic membrane filters and CN filters for primary salt water purification and put them into industrial applications. The 135 m3 large PVC polymerization reactor was put into operation. The dry process-based acetylene generation technology has kept maturing, and the ability of independent innovation in chlor-alkali technology and equipment has continuously improved, further enhancing the competitiveness of China's chlor-alkali industry.

Development focuses

1) Strengthen independent innovation and technological progress
China will strengthen the promotion of domestic ion-exchange membrane, dry-process acetylene generation technology, new dry-process cement manufacturing technology and low-mercury catalysts in the chlor-alkali industry, acc