Metallurgy / Chemicals / Rubber & Plastics

On September 11, the first phase of the PBAT project with an annual output of 120,000 tons of Changhong Biotechnology, a subsidiary of Changhong Hi-Tech, held a ceremony to start production in Shengzhou, Shaoxing City, Zhejiang Province.

Changhong Hi-Tech passed a resolution of the extraordinary general meeting of shareholders on October 27, 2020, and decided to invest 5 billion yuan to build a PBAT/PBS/PBT flexible production project of a 600,000 tons/year fully biodegradable thermoplastics industrial park. The project will be carried out in two phases. Each phase is 300,000 tons/year, and the total construction period is 5 years.

The first phase is the first to build a 120,000-ton/year PBAT production line, and the second-phase 250,000-ton/year PBAT production line is expected to be completed and put into production at the end of this year or early next year (quoted from the investor survey report on June 16).

Changhong Hi-Tech disclosed in its semi-annual report in August this year that its first phase of the 120,000-ton/year PBAT project will be completed in mid-September this year and has the conditions for input.

The concentrated release period of production capacity has come

With the arrival of the strongest "plastic ban", the current degradable plastics market has attracted much attention. As a biodegradable material, PBAT is listed as a national strategic emerging industry. It is a key project that clearly supports and encourages development in China. The current market gap is large and the development prospects are good.

According to statistics from the Institute of Biodegradable Materials, since June 2021, domestic PBAT production capacity is planned to exceed 2 million tons per year. On the other hand, according to the plan, more than 400,000 tons of PBAT will be put into production within this year. According to the latest information, Zhejiang Huafeng Environmental Protection Material Co., Ltd., a subsidiary of Huafeng Group, has a 30,000-ton/year device that has been put into operation on August 25, 2021; Changhong Hi-tech's first phase of 120,000 tons/year has just been put into production; Shandong Rui'an 60,000 The ton/year production capacity is expected to be put into operation in mid-September 2021; the third phase of Kingfa Technology’s 180,000 tons/year production capacity is planned to be put into operation in September 2021; Guangan Hongyuan’s 50,000 tons/year production capacity is expected to be put into operation in September 2021; Ruifeng Gaocai No.1 The 60,000 tons/year project is expected to be completed by the end of September 2021 and enter the commissioning stage; Wanhua Chemical (Sichuan) Co., Ltd. plans to start production at the end of 2021 with a 60,000 tons/year production capacity.

According to statistics from relevant agencies, it is expected that Hubei Yihua, Hengli Yulin, Kingfa Technology, Donghua Tianye, Jindan Technology, Yangmei Pingding, Zhejiang Changhong, Daun Co., Ltd., Shandong Ruifeng, and San More than ten projects including Fangxiang, Tongde Chemical, and Inner Mongolia Huaheng have released about one million tons of PBAT production capacity.

Degradable plastics market has broad prospects

my country has a huge demand for degradable plastics. At present, the annual consumption of degradable plastics is about 550,000 tons, the market size is about 11 billion yuan, and the substitution rate for non-degradable plastics is 1.2%. Among them, the consumption of packaging plastics is 500,000 tons. Plastic consumption is 40,000 tons, and other fields are 16,000 tons; my country’s demand for degradable plastics is expected to reach 2.25 million tons by 2025, and the market size can reach 47.7 billion yuan; by 2030, my country’s demand for degradable plastics is expected to reach With a market size of 4.28 million tons and a market size of 85.5 billion yuan, the overall demand is showing a slowing and rising trend. my country’s future degradable plastics market has a huge space. Driven by the ban on plastics, technical barriers are not high, and the production process has been relatively mature, PBAT has quickly become the core product of degradable materials. In the future, PBAT will be the mainstream product in the biodegradable plastics market with broad development prospects.

Work together to promote its rapid development

At present, global PBAT consumption is mainly concentrated in Europe, North America, Australia and Asia. The upper and lower joint efforts are the main driving force for the development of PBAT, that is, the upper-level policies spare no effort to promote and the downstream market accelerates.

In recent years, China has issued a series of policies to encourage the application and promotion of PBAT, and China's PBAT market has therefore been expanding. At present, China has become the main producer of PBAT in the world, and its products are exported overseas, with Europe and North America as the main export destinations. It is expected that with the continuous growth of global PBAT market demand, China's PBAT export and domestic market scale will continue to increase.

Future direction

The biodegradable plastics industry is an emerging industry, and therefore, it requires the investment of technology construction funds to at least reach a certain scale before profits can be generated. Small and medium-sized enterprises have limited financial strength, unable to achieve scale cost-effectiveness and market promotion efforts, and product costs are too high. It is difficult to promote and apply in the country. At present, the scale of production of domestic enterprises is generally small, and the market concentration needs to be improved.

Ni Ji, the chief analyst of the chemical industry of the Orient Securities Research Institute, pointed out that degradable plastics have entered the industry's explosive period, and the continuous increase of new PBAT projects indicates that the product has a low technical barrier. Although short-term profitability is good, if it fails to make breakthroughs in modification and products, it will inevitably fall into cost competition in the long run. The degree of integration, scale effect, and cost control will become key indicators to measure its competitiveness.