Industry News

Since October 2021, public companies have announced a planned LFP capacity of nearly 1 million MT/year, far exceeding the actual capacity in 2020.

Leading LFP company Dynanonic announced that it intends to raise a total of up to RMB 3.2 billion for a 110 KMT/year new phosphate system cathode material production base project and supplemental working capital.

Lopal announced its majority-held subsidiary Changzhou Liyuan New Energy Technology and Stellar Investment of Indonesia will invest in the development and construction of an LFP cathode material project with a capacity of 100 KMT/year. The total investment of the project is about USD 235 million.

In 2021, Lopal announced several LFP-related expansion plans. In April, Changzhou Liyuan acquired 100% equity of both BTR (Tianjin) and BTR (Jiangsu). In August, Changzhou Liyuan intends to set up a joint venture with Yonfer to invest in a 50 KMT/year LFP capacity.

In 2022, LFP will still be in a tight supply-demand balance, and when excess capacity will occur will depend on the rhythm of supply-side capacity release. In addition, the construction cycle of LFP projects is generally 1 year to 1.5 years, and the new capacity from the investments mentioned may hit the market in 2022 and 2023.

Source: New Chemical Materials

On November 5th, Shenzhen Stalloys officially announced its wholly-owned subsidiary, Songyan Melting Materials (Quannan), will investment in the construction of an LiPF6 project. Songyan intends to invest RMB 700 million in the construction of an LiPF6 project with a capacity of 15 KMT/year in Songyan Industrial Park, Quanan County, Ganzhou, Jiangxi Province at its existing plant. The products will be used as raw materials for Li-ion batteries for electric vehicles and consumer electronics. Construction will last 1.5 years. The project is planned to be built in four phases, as described below:

Phase I will have a capacity of 0.8 KMT/year, and the construction of the demonstration production line has been completed. The commissioning has been basically completed, the raw materials, personnel, and supporting facilities for production have been put in place, and the trial run of the equipment has been smooth so far.

Phase II will have a capacity of 3.0 KMT/year. The equipment has been procured and is expected to be installed in the plant in December 2021.

Phase III will have a capacity of 5.0 KMT/year, with equipment procurement to commence at the end of November 2021.

Phase IV will have a capacity of 6.0 KMT/year, with equipment procurement and installation to begin in 2022.

On November 5, Tinci disclosed that the 60 KMT/year liquid HPF6 plant and 150 KMT/year electrolyte mother liquor configuration plant built by its wholly-owned subsidiary, Jiujiang Tinci, had completed installation and commissioning of production equipment and had the conditions for trial production. The above-mentioned units have been officially put into production and entered the trial production stage.

On November 4, Jiangxi Shilei Fluorine Materials’ first public EIA announcement was made for its capacity expansion and transformation project of LiPF6 with a capacity of 6 KMT/year. The company intends to invest RMB 50 million to carry out the capacity expansion and transformation in the original plant area of the company. After the completion of the project, the capacity of LiPF6 will be expanded from 1.2 KMT/year to 6.0 KMT/year. Other capacities will be 8.4 KMT/year for hydrofluoric acid and 36.0 KMT/year for hydrochloric acid by-products. The project is located in the Fluorine Salt Chemical Industry Base in Huichang County, Ganzhou, Jiangxi Province.

On October 30th, DFD held a groundbreaking ceremony in Yangquan High-tech Zone New Materials Industrial Park for a 20 KMT/year LiPF6 and additives project. The total investment of the project was RMB 1 billion. The capacity of 20 KMT/year for high-purity crystal LiPF6 will be built in two phases with a construction period of 36 months, and the construction of Phase I will be completed by the end of 2022. This cooperation between DFD and Yangquan government is a great integration of technical advantages and industrial advantages, and a historical opportunity for government and enterprise to join hands to help new energy development.

On October 25th, Lee & Man (International) Investment held a signing ceremony with Ruichang City People’s Government for a high-end fluoropolymer and lithium battery new material project. The total investment of the signed high-end fluoropolymer and lithium battery new materials project is about RMB 2 billion, and future annual sales revenue will be about RMB 3 billion. The proposed capacity is 20 KMT/year for PVDF, 10 KMT/year for LiPF6, and 50 KMT/year for hydrofluoric acid (including 5 KMT/year for electronics grade products). It is planned to be put into operation in two phases.

Zhong’ang Mining Group announced its entry into the LiPF6 segment.

On October 12, China Kings Resources announced that the company signed a project investment agreement with the Management Committee of Jiangshan Economic Development Zone, Zhejiang Province. The project name is “25 KMT/year new energy fluorine-containing lithium materials and 80 KMT/year fluorspar project.” The total investment of the project is about RMB 1.55 billion. The project is planned to be built in three phases and to be completed within six years.

Phase I: LiPF6, etc. capacity of 6 KMT/year

Phase II: LiPF6 capacity of 9 KMT/year

Phase III: LiPF6 and lithium bis(fluorosulfonyl)imide capacities of 10 KMT/year plus an R&D center

Source: Fluorochemicals Industry News

Recently the price of LiPF6 has experienced rapid growth, breaking through RMB 300,000/MT in June 2021, RMB 400,000/MT in July, and RMB 450,000/MT in August.

As of November 10th, 2021, China’s mainstream transaction price range for LiPF6 was RMB 500,000-580,000/MT. Compared with the beginning of the year, prices soared 404.67%. Although price quotes are high, there are very few transactions at those high prices. At present, the actual transaction price is basically stable. The LiPF6 market is still in a state of short supply, and many manufacturers who quoted high prices do not have goods.

The impact of the “Dual Control” policy has decreased, and new production capacity of enterprises such as Tinci has been released. The overall supply of LiPF6 has increased, and the enterprises are basically operating at full capacity. The industry utilization rate is about 90%. In terms of the industry’s current expansion process, the main capacity release will basically be concentrated in 2023. Therefore, the tight supply of LiPF6 may continue until 2022.

According to forecasts, the global demand for Li-ion batteries will reach about 1,200 GWh by 2025, corresponding to a demand for electrolyte of about 1.32 million MT—a CAGR of 35% during this period. Based on a ratio of 0.12 MT LiPF6 per 1 MT of electrolyte, the global demand for LiPF6 is expected to be about 165 KMT in 2025. From a domestic perspective, overall electrolyte shipments are expected to reach 865 KMT by 2025—a CAGR of 31.7%. This would bring the overall market size to about RMB 20 billion.

Source: Fluorochemicals Industry News

On the evening of November 10th, 2021, the leading flame retardant company Wansheng (603010.SH) announced that it would enter the electrolyte additive industry, and the scale of the proposed project of the subject company will be 95.5 KMT/year. The project will be completed in two phases.

Phase I will have a capacity of 20.5 KMT/year (VC: 5.0 KMT/year; FEC: 5.0 KMT/year; DTD: 1.5 KMT/year; NNP: 7.5 KMT/year; VEC: 0.2 KMT/year; MMDS: 0.2 KMT/year; DENE: 0.2 KMT/year; TMSP: 0.1 KMT/year; TMSB: 0.1 KMT/year; 1,3-PS: 0.5 KMT/year; BOB: 0.2 KMT/year). Phase I will be built between December 2021 to December 2023.

Phase II will expand capacity to reach 95.5 KMT/year. Timing will depend on the market situation after Phase I is put into operation.

Source: Fluorochemicals Industry News

DFD New Materials recently announced that its subsidiary Henan Nonferrous Metals Industry signed a purchase agreement with Enchem in which Enchem Co., Ltd. intends to purchase no less than RMB 1 billion worth of LiPF6 products from Henan Nonferrous over the next three years.

DFD currently has an LiPF6 capacity of 15 KMT/year, with total shipments of 13 KMT expected in 2021. DFD plans to add another 40 KMT/year of capacity next year, bringing total capacity to 55 KMT/year, with annual output and sales of more than 30 KMT. Output and sales from 2023 onwards will gradually be increased according to market conditions.

DFD’s LiPF6 is a crystalline solid that has high purity, consistent quality, and a wide range of applications compared to liquids, and it is sealed with inert gas during encapsulation for safe transportation over long distances.

In terms of cost advantage, DFD has a mature upstream and downstream industrial layout for the three elements involved in the production of LiPF6 products: fluorine, lithium, and phosphorus, and it is able to master the supply of raw materials, which can effectively avoid impacts on product costs caused by fluctuations in raw materials. After years of research on equipment, the company has formed the advantage of large-scale equipment and intensive production of devices. The third advantage it has is the scale advantage. At present, the company has a scientific and reasonable distribution of customers, stable supply relationships, and obvious advantage in the industry in terms of supply volume. At the same time, the company is also increasing its research and development efforts, integrating relevant resources, improving the element recovery rate and extending the supply chain to further reduce costs and increase efficiency.

Source: Fluorochemicals Industry News

After the company’s 50 KMT/year adiponitrile project was smoothly put into operation at Huafon’s Chongqing plant, another 50 KMT/year adiponitrile facility was put into trial production this year. The Phase II 100 KMT/year adiponitrile facility currently under construction is expected to be put into operation in Q1 2022. The Phase III 100,000 MT/year adiponitrile capacity is currently being designed, and it is expected to be put into operation in 2023.

Adiponitrile is the key raw material for the production of nylon 66. However, adiponitrile production has high technical barriers, and the supply of adiponitrile is monopolized by companies from leading chemical countries, such as the United States, etc.

As adiponitrile has been monopolized by foreign countries for a long time, the National Development and Reform Commission (NDRC) has issued three documents in the past 10 years to encourage Chinese companies to achieve successful synthesis technology to promote the localization of adiponitrile technology.

Some local chemical companies have continuously devoted themselves to the development of adiponitrile technology for years. However, adiponitrile production entails a long process with a complicated catalyst system and high technical barriers. A few years ago, some companies built adiponitrile facilities. Afterwards, they had no choice but to shut down the facility due to high costs and explosion accidents.

In July 2019, Huafon built the first industrialized 50 KMT/year adiponitrile facility in China. It was the first industrial project in China to produce adiponitrile and the first adiponitrile project in China to use self-developed technology. Up to present, it has produced more than 100 KMT of high-quality adiponitrile.

Huafon made a major breakthrough in the development and innovation of the process route from adipic acid to adiponitrile in 2019. After its technical breakthrough, it built a complete supply chain from benzene to adipic acid, adiponitrile and adipic diamine, and to nylon 66 for the very first time in China. Hexanediamine is the key raw material used to synthesize nylon 66. Hexanediamine is from adiponitrile, which has always been considered as a core chemical product for nylon 66.

Globally, the butadiene method, acrylonitrile method, and adipic acid ammonification method are currently the three methods used to produce adiponitrile. At this point, the butadiene method and acrylonitrile method are still fully monopolized by foreign companies.

By using the adipic acid method, there are three technical difficulties: 1) Nitrile reactor is used as the core equipment; 2) Reuse of the by-products from adipic acid ammonification (especially in the early stage of production, the transportation of tar residue with high viscosity might be troublesome); 3) The adiponitrile produced by adipic acid ammonification method has poor quality.

In terms of the innovative achievement of Huafon’s adiponitrile technology, the experts have given their appraisal reasons. On the one hand, the supported Ru-M catalytic system for selective hydrogenation of benzene has been constructed, and a complete set of patent devices and processes with independent intellectual property rights have been designed to realize the large-scale and low-cost industrial continuous production of refined adipic acid. On the other hand, the new adiponitrile catalytic ammoniation preparation system from adipic acid has been self-developed and designed, breaking through the control limitations over reaction process and direction by original reaction facility, solving the high single consumption of adipic acid, difficult stability control, low adiponitrile content, serious waste of resources and environmental pollution faced by traditional processes.

In addition, the adiponitrile distillation and purification system were invented and designed to solve the separation problem of adiponitrile by-products, shortened the process, improved the adiponitrile impurity, so as to reduce the equipment investment, operation, and maintenance costs. The system has a long operation cycle with good stability.

Furthermore, the experts also believe that the project has developed the hexanediamine three-phase reaction synthesis system, which has solved the problem of uneven distribution of gas-liquid-solid in large reactors, improved the reaction efficiency, reduced the generation of side reaction products, recycled the alkali liquor in the entire process, and solved the blockage problem of the reaction system.

At the same time, the project realized the comprehensive utilization of the by-products from adiponitrile/hexamethylenediamine, reduced the unit consumption of adipic acid, solved the separation and purification of the by-products from adiponitrile/hexamethylenediamine, and obtained high value-added products and irreplaceable products.

Up to present, the project has obtained 10 patents and 8 utility models in China. Meanwhile, it also made and revised three industrial standards, corporate standards, and enterprise standards.

According to Huafon’s14th Five-Year Plan, after the 50 KMT/year adiponitrile project successfully achieved industrialization in 2019 at the company’s Chongqing plant, another 50 KMT/year adiponitrile facility was put into the trial production this year. The Phase II 100,000 MT/year adiponitrile facility currently under construction is expected to be put into operation in Q1 2022. The Phase III 100,000 MT/year adiponitrile is currently being designed, and it is expected to be put into operation in 2023.

Source: Chemical New Materials

On October 26, the State Council issued the “Action Plan for Carbon Peak by 2030” (hereinafter referred to as the plan), focusing on the target of carbon peak by 2030 and making the overall arrangements for promotion of carbon peak.

On October 24, the Central Committee of CCP and the State Council issued the “Opinions on Completely, Accurately and Comprehensively Implementing the New Development Concept and Doing a Good Job for Carbon Peak and Carbon Neutralization”.

On October 21, the five departments (National Development and Reform Commission, Ministry of Industry and Information Technology, Ministry of Ecological Environment, etc.) jointly issued the “Several Opinions on Strict Energy Efficiency Constraints to Promote the Energy Conservation and Carbon Reduction in Key Areas”, and specifically issued the “Action Plan for Strict Energy Efficiency Constraints to Promote the Energy Conservation and Carbon Reduction in Key Petrochemical Industries (2021-2025)” for petrochemical and chemical industry.

Recently, there are many policies related to carbon peak, carbon neutralization and carbon reduction, which represents China’s determination to put efforts on the “30-60 double carbon” target.

In order to achieve the emission reduction target, many governments and relevant regulators in the world will introduce the related policies and measures, which will affect the production and operation activity, bringing significant pressure to those companies with high emission and high energy consumption. During the process of low-carbon transformation, the companies also face the uncertainty brought by technological changes. If they can master the key technologies, they can significantly enhance the competitive advantage and improve their leading position in the industry. On the contrary, they might be eliminated.

According to the statistics from the International Energy Agency, in 2019, the direct emission of carbon dioxide from the production and consumption of chemicals and waste treatment totaled 1.6 billion MT, with an indirect emission of 600 million MT, accounting for 6% of the total global emissions.

Globally, the proportion of carbon emissions from the chemical industry is not high. However, it is difficult to reduce the emissions as it directly involves the basic energy such as coal, oil and natural gas. Meanwhile, it is also difficult to calculate the carbon emissions generated from chemical reaction. Among the industries, it is relatively more difficult to reduce the emissions in the coal industry. China’s coal consumption accounts for 58% of total energy consumption, and the emission of coal chemical products such as formaldehyde, synthetic ammonia and coal to oil is very strong with high carbon concentration during the production process. Thus, the carbon emission in the coal industry shall be the emphasis of the current work.

For the “30-60” target, there will be great challenge covering the entire life cycle from carbon source, carbon application to carbon emission and carbon trading. In terms of the carbon source, the coal power companies will face great risk of stressed renewable energy, unstable operation of renewable energy or certain operation risk to the power grid, and the application of hydrogen energy and energy storage is not as expected as well. In terms of the carbon emission, the capture technology of carbon dioxide needs large amount of R&D funds. The key path for the promotion and application of carbon capture in various segments is still in the early stage, and the technology development might not be as expected in the future. In terms of carbon application, some high-carbon industries will suffer the capacity compression in the short term under the pressure of short-term emission reduction. The higher carbon price will increase the operating cost of high-carbon emission companies and the investment of terminal electrification transformation companies. In terms of carbon trading, the trading mechanism initially established needs to be further developed towards systematization, platformization and marketization.

Among the actions of carbon peak, those involving the petrochemical industry mainly include energy green and low-carbon transformation action, energy conservation and carbon reduction efficiency action, carbon peak action in the industrial segment, circular economy for carbon reduction action and green and low-carbon science and technology innovation action. Among them, the energy conservation and carbon reduction efficiency action proposed to strictly control the intensity of energy consumption, reasonably control the energy amount, implement the energy budget management, and strengthen the energy-saving review for fixed investment projects. The carbon peak action in the industrial segment proposed to strictly enforce the project access, steadily and orderly develop the modern coal chemical industry, promote the lightweight of petrochemical and chemical raw materials, encourage the companies to save the energy and carry out the upgrade and transform, as well as to promote the clean energy utilization and material recycling. The green and low-carbon scientific and technological innovation actions include large-scale utilization of renewable energy. Energy conservation, hydrogen energy, energy storage, power battery, carbon capture, utilization and storage (CCUs) are the key directions in the future.

Source: China Chemical Industry News

Recently, the Ministry of Ecology and Environment released the “New Pollutants Treatment Action Plan (Draft for Comments)”.

Unlike the conventional pollutants, the new pollutants are newly discovered or concerned pollutants with hazardous risks to ecological environment or human health. New pollutants have not yet been incorporated into the management measures or the existing management measures that are not able to effectively prevent and control their risks. Most new pollutants have biological toxicity with environmental persistence and bioaccumulation, and might potentially cause significant risks to environment and human health, even if the concentration is low. The production of toxic and hazardous chemical substances is the main source of new pollutants.

This action was made to effectively strengthen the governance of new pollutants, as well as to protect the environment and human health. By 2025, the regulations and institutional systems for environmental risk management for chemical substances and the environmental risk management for toxic and hazardous chemical substances will be created, and the List of New Pollutants under Key Control will be dynamically released. It is required to complete the screening of hazardous chemical substances with high concern and high output (consumption) in both China and international market, and complete the environmental risk assessment for a number of chemical substances.

It is required to implement the “one product, one policy” and restrict the production, processing, use, import and export of PFOS, related salts and related compounds (PFHxS), HBCD, decabromodiphenyl ether, SCCP, PCP, its salts and esters, HCBD and Dekron. It is required to strictly restrict the application of PFOS, related salts and perfluorooctane sulfonyl fluoride (PFOS), perfluorooctanoic acid, related salts and compounds (PFOA), as well as nonylphenol. It is required to regulate the use of antibiotic drugs, and the standard emissions of dioxins shall be basically realized in key industries. By 2035, it is required to build up the complete treatment system for new pollutants. The control capability for environmental risk shall be significantly improved, and the environmental risks caused by new pollutants shall be basically controlled.

Source: Chemical 365

Recently, the NDRC has issued the “Promotion of the Action Plan for Energy Conservation and Carbon Reduction in the Petrochemical and Chemical Industries (2021-2025)”, which proposed to guide the orderly withdrawal of inefficient capacity. According to the action plan, it is required to strictly implement the “Industrial Structure Adjustment Guidance Catalogue” to eliminate the 2 million MT/year and below refinery facilities, the natural gas atmospheric pressure intermittent conversion process for synthetic ammonia, the calcium carbide furnaces with the capacity of less than 12,500 kVA and open calcium carbide furnaces. It is strictly prohibited to build the new 10 million MT/ year below normal pressure reduction, 1.5 million MT/year below catalytic cracking, 1 million MT/year below continuous reforming (including aromatics extraction), 1.5 million MT/year below hydrocracking, 800,000 MT/year below naphtha cracking ethylene and the fixed layer intermittent gasification synthetic ammonia facilities. It is required to carry out the capacity reduction replacement for new refinery projects and capacity equal or reduction replacement for the new calcium carbide, urea (one of the synthetic ammonia downstream industry chain) projects. It is required to quickly eliminate the 300,000 MT/year and below ethylene, as well as the 100,000 MT/year and below calcium carbide facilities. It is required to efficiently eliminate the idle capacity.

Source: Chemical 365

The Air Pollution Comprehensive Control Program for Autumn and Winter Season of 2020-2022” (hereinafter referred to as the “Program”) will be issued and implemented in the near future. The Ministry of Ecology and Environment stated that the horse-race mechanism will be introduced in the action. The enterprises with good environmental performances can independently carry out the emission reduction, and the enterprises with poor environmental performances need to carry out the staggering emission reduction. The local government shall not carry out the egalitarianism regardless of the environmental performances of the enterprises.

The Ministry of Ecology and Environment has notified the air quality control targets to 59 cities, including the PM2.5 control and the number of days with heavy pollution. In addition, it also clearly required the local government not to carry out the perfunctory actions or temporary measures.

Considering the environmental conditions and the impact of regional transmission in different regions, the control program for winter and autumn season of 2021-2022 will also cover northern Hebei, northern Shanxi, eastern and southern Shandong, southern Henan on the basis of Beijing, Tianjin, Hebei and the surrounding areas (“2 + 26” cities) as well as Fenwei Plain cities.

Implementation scope:

• Beijing
• Tianjin
• Hebei province: Shijiazhuang, Tangshan, Qinhuangdao, Handan, Xingtai, Baoding, Zhangjiakou, Chengde, Cangzhou, Langfang, Hengshui, Xiong’an New Area, Dingzhou and Xinji
• Shanxi Province: Taiyuan, Yangquan, Changzhi, Jincheng, Datong, Shuozhou, Jinzhong, Yuncheng, Xinzhou, Linfen and Lvliang
• Shandong province: Jinan, Zibo, Zaozhuang, Dongying, Weifang, Jining, Tai’an, Rizhao, Linyi, Dezhou, Liaocheng, Binzhou and Heze
• Henan province: Zhengzhou, Kaifeng, Luoyang, Pingdingshan, An’yang, Hebi, Xinxiang, Jiaozuo, Puyang, Xuchang, Luohe, Sanmenxia, Nanyang, Shangqiu, Xinyang, Zhoukou, Zhumadian and Jiyuan
• Shaanxi province: Xi’an, Tongchuan, Baoji, Xianyang, Weinan (including Hancheng) and Yangling Demonstration Zone
• Jiangsu province: Xuzhou, Lianyungang and Suqian
• Anhui province: Huaibei, Fuyang, Suizhou and Bozhou

Key targets: During the autumn and winter season (October 1, 2021 to March 31, 2022), the said cities shall complete the PM2.5 control target and the number of days with heavy and above pollution control target.

Main tasks:

• Resolutely curb the blind development of “two high” project.
• Implement the output reduction in the steel and iron industry.
• Actively and steadily implement the treatment of loose coal.
• Carry out the rectification for boilers and furnaces.
• Promote the investigation and rectification for outstanding issues of VOCs treatment.
• Accelerate the treatment of diesel truck pollution.
• Strengthen the control for straw burning.
• Strengthen the comprehensive control for dust.
• Effectively respond to heavy pollution weather.

In the implementation process, it is required to resolutely prevent the “one size fits all” policy, and not allowed to take the perfunctory and brutal measures.

During the autumn and winter season, the Ministry of Ecology and Environment will send the warning notice to the cities that cannot meet the air quality target, or the cities with slow progress, or the cities where the air quality index (AQI) continued to “burst” based on air quality improvement in each city every month. In terms of the cities that fail to complete the final air quality improvement target or the cities with slow progress, the main government officials shall be publicly interviewed. If any tampering or fake monitoring data is found, the assessment result will be directly deemed unqualified, and responsibility will be investigated according to the law. Combined with the second round of the central ecological environmental protection arrangements, the cities with outstanding environmental problems shall be listed in the scope of the central ecological environmental protection inspection. In terms of the cities with serious problems, the special inspection might be carried out.

Source: Chemical 365