China’s Demand for Fluorine Resins to Grow 7.0% Annually until 2016

By Luo Yamin, China National Chemical Information Center

Major varieties of fluorine resin include polytetrafluoroethylene (PTFE), polyvinylidene fluoride (PVDF), perfluorinated ethylene-propylene copolymer (FEP), fluoroethylene-vinyl ether copolymer (FEVE), ethylene-tetrafluoroethylene copolymer (ETFE), polychlorotrifluoroethylene (PCTFE), ethylene-chlorotrifluoroethylene copolymer (ECTFE), polyvinyl fluoride (PVF), and tetrafluoroethylene-perfluorinated alkyl vinyl ether copolymer and tetrafluoroethylene-perfluorinated methyl vinyl ether copolymer (meltable polytetrafluoroethylene, PFA/MFA). Less important varieties include tetrafluoroethylene-hexafluoropropylene-vinylidene fluoride copolymer (THV), tetrafluoroethylene-hexafluoropropylene-perfluorinated alkyl vinyl ether copolymer (EPE), and tetrafluoroethylene-perfluorinated dimethyl dioxol copolymer (TFE/PDD), is copolymerized using tetrafluoroethylene and perfluorinated dimethyl dioxol, and has excellent transparency), etc. The PTFE output now accounts for 50%-60% of the total output of fluorine resins, and the proportion once reached 80%.
   There are more than 30 fluorine resin producers in the world. Major producers include DuPont and Dyneon of the United States, Arkema of France, Solvay Solexis of Italy, Daikin, Asahi Glass and Kureha of Japan, and China’s Shandong Dongyue Group Ltd, Sichuan Chenguang Research Institute of Chemical Industry, Jiangsu Meilan Chemical Group and Shanghai 3F New Materials Co Ltd, etc. As of the end of 2011, the world’s total capacity to make fluorine resins reached 350 thousand t/a (of which the PTFE capacity was around 50%). The consumption mix of fluorine resins in the world was 50% for industrial production, 24% for membrane products, 13% for coatings, 8% for electronic industry, 2% for wire and cable, and 3% for others.
   China successfully developed fluorine resins in 1958, and realized the commercial production of fluorine resins in Shanghai. At present, China’s fluorine resin producers mainly produce PTFE, PVDF, FEP and FEVE. Only a few domestic enterprises produce PVF and PCTFE, and no domestic enterprises have yet achieved mass production of other fluorine resins. Among the fluorine resins, China’s capacity, output and consumption of PTFE account for 67%, 84% and around 71% of the total, respectively.
In 2011 China’s capacity, output and consumption of fluorine resins reached 130 thousand t/a, 77 thousand tons and 62 thousand tons, respectively, up 7.3%, 14.9% and 8.8% year-on-year. China consumed 44 thousand tons of PTFE and 18 thousand tons of other fluorine resins.
   In 2011 China had ten PTFE producers with a total capacity of 80 thousand t/a, the output reached 60 thousand tons and the average operating rate was 71%.
   Shandong Dongyue Group Ltd is China’s largest PTFE producer and its capacity to produce PTFE was 30 thousand t/a in 2011 including 7 thousand t/a of high quality PTFE. The development of PVDF is slower than that of PTFE. It has been accelerated however in the last two years. At present, China’s major PVDF producers are Shanghai 3F New Materials Co Ltd and Arkema. In 2011 domestic PVDF output was around 8 thousand tons, up 100% year-on-year. Major reasons for the output growth included the capacity expansion of Inner Mongolia 3F Wanhao Fluorochemical Co Ltd and the startup of Arkema’s PVDF unit in Changshu.
   In addition to the use of PTFE and PVDF, China’s fluorocarbon coatings also use FEVE as raw material. Currently, most FEVE made by Chinese companies is multipolymer of mostly chlorotrifluoroethylene (CTFE) and vinyl ester. In 2001 China’s total capacity to make FEVE was 20 thousand t/a, being the same as that in 2010. The domestic output reached around 5 thousand tons and part of output was for export. Major FEVE producers in China include Dalian Zebon Fluorocarbon Paints Stock Co Ltd, Changshu 3F Fluorochemical Industry Co Ltd, Wuxi Wanbo Coatings Chemical Co Ltd, Qingdao Hongfeng Fluorine & Silicon Science Co Ltd and Jinan Hualin Chemical Industry Co Ltd, etc. Dalian Zebon Fluorocarbon Paints Stock Co Ltd is China’s leading FEVE producer with a capacity of 10 thousand t/a.
   China’s capacity to produce FEP was always relatively small and it declined to around 7 thousand t/a in 2011, down 15% year-on-year. China has very few PCTFE and PVF enterprises with a total capacity of 1 thousand t/a and 300 t/a, respectively. In 2011 domestic output of PCTFE and PVF was around several hundred tons. Due to the problems in domestic product processing performance, China still needs to import the two resins to fill vacancies in the domestic market.
   In the import and export records of China's customs, fluorine resin is divided into “polytetrafluoroethylene, in primary forms” (HS code: 39046100) and “other fluoro-polymers, in primary forms” (HS code: 39046900, including FEVE, PEP and PVDF, etc.) In 2011 China imported 14.5 thousand tons of fluorine resins, down 14.2% year-on-year, and China’s export volume of fluorine resins reached 31.1 thousand tons, a year-on-year growth of 16.4%. The import volume of PTFE accounted for 39% of the total import volume of fluorine resins, up slightly year-on-year. Among exported fluorine resins, the proportion of PTFE was 73%, down 8 percentage points year-on-year.
   Compared with foreign enterprises, domestic fluorine resin producers have fewer trademarks in variety. China’s has excess capacity for low-end and general-purpose products, while the market for high-end and special-purpose products partially relies on imports. Among fluorine resins, PTFE is the most prominent. China’s development mode of PTFE basically relies on outward expansion, market share expansion is achieved through cost advantage and price reduction, less work is done in the stability and enhancement of product quality and expansion of product variety, the product variety is minimal, and PTFE with high quality and high performance still must be imported. The main reason for this is that domestic enterprises invest too little for R&D.
   It is expected that by 2006, China’s total demand for fluorine resins will reach 87 thousand tons with an average annual growth of 7.0%, of which the average annual growth of PVDF will be the highest. The demand for fluorine resins in coatings, and wire and cable sectors will continue to be brisk. However, there will still be a considerable gap between domestic products and the products of well-known foreign enterprises in terms of the performance, and some products will still have to be imported.
   Major fluorine chemical companies in China are keen to build new PTFE and PVDF units with relatively mature technologies. Chenguang Research Institute of Chemical Industry started up its 5 thousand t/a high-quality PTFE dispersion resin project in early 2012 and is preparing to construct 5 thousand t/a high-quality PTFE suspension resin project. Shanghai 3F New Materials Co Ltd will also construct 11 thousand t/a PTFE unit in Changshu. Juhua Group, Jiangsu Meilan Chemical Group and Shandong Dongyue Group Ltd are also constructing or plan to construct PTFE projects with capacities mostly ranging from 7 thousand t/a to 10 thousand t/a. It is expected that during 2014-2015, China’s released capacity of PTFE will be more than 40 thousand t/a, and the overcapacity of PTFE in China will be more serious.
   In addition to the constant capacity expansion of Shanghai 3F New Materials Co Ltd in Inner Mongolia, Arkema expands its 7 thousand t/a unit in Changshu based on its first phase 5 thousand t/a unit. Kureha of Japan also constructs PVDF plant in China, and its new 5 thousand t/a PVDF project is expected to start up in August 2013.
   In general, the enthusiasm for investing in the production of PTFE and PVDF is relatively high, the capacity expansion of fluorine resins is excessive and the average operating rate will be likely to decline. It is expected that before 2016, China will be likely to have the first industrialized ETFE unit, the newly added capacity of PCTFE and PVF will be 1 thousand t/a and several hundred t/a, respectively; however, China will still be unable to realize industrialized production of high-end fluorine resins like PFA/MFA, THV or EPE, and these products will be imported.