High Price of Petroleum to Impact China’s GA Industrial Chain

Recently, CCM publishes its newest report, Production& Market of Glyoxylic Acid (GA) in China, which introduces the developing history of GA in China, the studies from raw material to the supply situation of downstream industrial chain, price trend, production capacity & output, different technology, and the major factors to influence the development of GA, main producer, and forecast of GA development tendency in the future 5 years.

According to the report, China has started glyoxylic acid (GA) production with oxalic acid electro reduction method in early 1985, and it has gone through the 2 rapid developments during 2002 to 2003 and 2005 to 2007. At present, China has been the GA main producer in the world. GA production reached 134,880 tonnes in March 2011 and is predicted to reach 135,380 tonnes at the end of 2011. There are about 20 producers in China at present, which are mainly located in Hubei, Jiangsu, Shanghai, Hebei and Shandong Province, covering 95% of GA capacity in China.

Although the capacity and output of GA is very large, the consumption of GA is still concentrated in China. GA is mainly used to produce p-hydroxylphenylglycine, DL-p-hydroxy phenylhydantoin, allantoin, vanillin, 2-hydroxyl-phosphine acetic acid and other chemical products in China. The demand of downstream products especially vanillin, p-hydroxylphenylglycine, and DL-p-hydroxy phenylhydantoin are the dynamic of GA to grow. China is the main producer and exporter of vanillin, and 75% of vanillin is used for export. In recent 2 years, the main reason to stimulate the capacity of GA to extend is to use GA method to produce vanillin. The consumption of GA to produce vanillin occupied 38.81% in 2010,and it has become the largest consumption area of GA in China.

According to the report, the production methods of GA is researched and analyzed. Recently, glyoxal method is basically used to produce GA. To process the cost analysis of using glyoxal method to produce GA, we can know glyoxal is the chief component of GA, while the price rise and fall of petroleum influences the forward price of glycol and then influences the price of glyoxal. The price rise and fall of petroleum delivers to the price of GA quickly, and the influence is also very large.

Mr Shaohong Xu, the research from CCM indicates that along with the widely application of GA method to produce vanillin and steady demand of several other consumption area, the demand of GA domestic still presents up-trend, but the price raise of petroleum will cause the shortage of GA resources, and its price will increase. At the same time, due to the unordered development, the downstream productions of GA are competitive, and their price raise slowly even some prices of products presents downtrend. Along with the price raise of raw material and cost raise of environmental protection, the profit of producing DA downstream productions is decreasing in recent years. In the age of high price of petroleum, China’s GA industrial chain will face the bigger and bigger impact.

The original source from:http://www.cnchemicals.com/PressRoom/PressRoom.aspx