According
to Biomaterials
China News which was
issued by CCM in
October, the domestic ex-works price of propylene oxide (PO),
a raw material of polypropylene carbonate (PPC), has
been rising since early May 2013. The price has increased from USD1,880.1/t in
early May 2013 to USD2,115.1/t in late Sept. 2013, up by approximately 12.5%.
There are three main factors behind the price uptrend of PO in May-Sept. 2013.
Firstly, many PO enterprises undertook
equipment maintenance of their PO production facilities during April-June 2013,
which led to the tight supply during this period and thus causing an increase
in the domestic PO price. In China, due to the highly concentrated production
capacity in the domestic PO industry (the capacity of top six PO enterprises
accounted for 75.7% of China's total in 2012), the market supply of PO is
reduced significantly when the major enterprises are undertaking equipment
maintenance.
Secondly, the domestic price of the raw
materials for PO witnessed an increase in July-Sept. 2013, which provided
support for the domestic PO price. According to related statistics, the
producer prices of propylene in East China and liquid chlorine in China have
increased by 11.0% and 25.4% respectively from July 2013 to Sept. 2013.
Propylene and liquid chlorine are two main raw materials of PO.
Thirdly, the increasing market demand from
downstream industries also drove up the PO price from July 2013. Along with the
PPC industry, domestic PO is also consumed in the polyether polyol (PPG)
industry, which accounts for approximately 75% of the total PO consumption.
According to Wang Hongke, a salesman of Befar Group Co., Ltd. (a leading PO
supplier in China), Sept. and Oct. coincide with the peak consumption season
for PPG every year, which helped to boost the demand for PO and in turn drove
up the domestic PO price.
However, the increasing price of PO has had
little effect on the domestic PPC price, despite PO accounting for 60%-70% of
the total production cost of PPC resin. According to CCM's price monitoring,
the average ex-works price of PPC from the major domestic manufacturers
increased slightly from USD4,520/t in May 2013 to USD4,560/t in Sept. 2013,
only up 0.9%.
The inability of PPC manufacturers to raise
the price of PPC is the key factor behind its relatively stable price. Mr.
Zhao, Sales Manager of Nanyang Zhongju Tianguan Low Carbon Technology Co., Ltd.
(the largest PPC producer in China with a capacity of 22,500t/a), observed that
PPC manufacturers may lose customers if they raise the PPC price in view of the
currently small domestic PPC market. This is because PPC is very expensive
compared with traditional plastics such as low density polyethylene (LDPE,
currently priced at USD2,025.9/t) or
polypropylene (PP, currently at USD1,855.8/t). Even biodegradable plastics such
as PLA, which is currently priced at USD4,401/t, are more cost competitive than
PPC.
In summary, the increasing PO price has
brought great cost pressure to domestic PPC enterprises, and their profit will
be reduced. PPC producers should pay more attention to the downstream products.
PPC producers can take actions to improve the competitiveness of PPC in the
plastics marketplace, such as improving the comprehensive properties of PPC
resin such as its solvent resistance and oxygen insulation in order to expand
the scope of application of PPC.
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Hubei Guanghe successfully produces
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China's enterprises actively establish new biological
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China's corn price decreases slightly from
Aug. 2013
China's PLA import volume decreases in Aug.
2013
China's import volume of dry cassava
decreases in Aug. 2013
China's import volume of castor oil and its
derivatives decreases in Aug. 2013
Guinea-Bissau imposes ban on use of plastic
bags in commodity trade
A Dutch teenager invents a garbage collection
device
5.6 billion paper packages of milk beverage
recycled in China in H1 2013
Doctors in Zhongshan Hospital implant
degradable stents
Three companies to establish a new biotech
company
Biomaterials
China News, with 12 to 14 topics in one issue, published by CCM on 8th
every month, will bring you the latest information on the market dynamics,
company dynamics, new biomaterials products, new biomaterials technology development,
new legislations as well as policies and raw material supply dynamics, which are
shaping the significant market intelligence of the industry.
CCM is dedicated to market research in China
Guangzhou CCM Information Science & Technology Co., Ltd.
17th Floor, Huihua Commercial & Trade Mansion, No.80 Xianlie Zhong Road, Guangzhou 510070, China
17th Floor, Huihua Commercial & Trade Mansion, No.80 Xianlie Zhong Road, Guangzhou 510070, China
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