Recently, when CCIN reporters learned about the development of chlor-alkali enterprises, they discovered an extremely strange phenomenon: Although the domestic chlor-alkali production capacity has long been surplus, there are still some companies in the country that are expanding in contrarian directions. The number of companies and the cumulative production capacity are astounding. . Are these companies not afraid of "death"? Doesn’t the government and the market have the power to stop this “suicide†behavior? Or is there a game between the two?
Already 10 million tons surplus will expand 10 million tons
According to the statistics of the relevant industry associations, the caustic soda production capacity of the main product of the chlor-alkali industry in China has doubled in the five years since 2004 and has become the world's largest. China's existing production capacity of caustic soda is 27.93 million tons, while the apparent consumption is only 17.22 million tons, and the export volume is 1.53 million tons. The production capacity has exceeded 10 million tons, which is a large surplus.
The overcapacity has brought a great negative impact on the industry. The most obvious effect is the lack of start-up, and the price is difficult to rise. Wang Haijun, senior economist of the sales management office of Jiangsu Anbang Electrochemical Company, told the CCIN reporter that currently, 32% of ionized membranes are sold in Jiangsu at a market price of RMB 400/ton, and the production cost is as high as RMB 450/ton. It is understood that after the Mid-Autumn Festival in eastern China's Jiangsu and Zhejiang regions, caustic soda prices fell 30 to 40 yuan / ton.
The low price shocks have caused most companies to lose money. China Chlor-Alkali Industry Association statistics on 77 key enterprises in the industry show that from January to June this year, 23 companies have suffered losses, with a loss of 29.9%.
According to CCIN reporters, despite the fact that the production of main products downstream of caustic soda has shown a different degree of growth than the financial crisis, it is still insufficient compared to the domestic supply of large amounts of caustic soda and has not formed effective support for the price of caustic soda. At the same time, the export disruption caused by the decline in overseas demand has continued since 2009 and has not seen any significant improvement. Many industry insiders predict that the domestic chlor-alkali production capacity will remain in the long-term. This will also be the biggest problem facing the industry.
Although the domestic chlor-alkali market is in a sluggish state due to overcapacity, according to planning statistics in various aspects, the domestic capacity for newly-built caustic soda projects in the first half of this year will still reach 2.975 million tons, and will continue to increase production capacity by 3 million tons in the second half of this year. If these planning projects can be put into operation smoothly, it is expected that the newly added caustic soda production capacity will reach 5.97 million tons this year. According to the long-term planning of the localities, the domestic caustic soda production capacity will increase by 10.405 million tons in the next three years!
Shandong is a large chlor-alkali producing province and its production capacity accounts for more than one-third of the country's total. According to CCIN reporters, the new capacity in the province in the second half of this year will be at least 1.24 million tons. Jiangsu Huai'an, Changzhou Jintan, and Xuzhou Fengxian have rich underground salt mines and are close to the largest market in East China. Therefore, there are many local chlor-alkali enterprises. According to the CCIN reporter, in the second half of this year, the capacity of the three expansion projects will be nearly 600,000 tons. In recent years, new chlor-alkali installations in China have been gradually concentrated in resource-intensive western regions. According to preliminary statistics, the production capacity of new caustic soda production in Inner Mongolia will reach 5 million tons this year and next year.
In addition, the scale of expansion of chlor-alkali enterprises in Shanxi and Hebei are all in the hundreds of thousands of tons and even millions of tons.
There is reason to expand their respective resources are still palm treasure
The CCIN reporter learned that these chlor-alkali companies that have expanded their production have their own reasons for expanding production.
One reason is for personal use.
Alumina is a major downstream area of ​​caustic soda. The amount of caustic alkali consumed by single-ton alumina is 100-130 kg. Shandong is the most rapidly developing area of ​​the alumina industry. The CCIN reporter found that, in order to ensure upstream resources, alumina companies in Shandong Province have recently started to invest in chlor-alkali projects. Weiqiao Venture Group, one of the main companies in electrolytic aluminum, and Liaocheng Xinfa Group all invested in the caustic soda project. Dongying Jinmao Aluminum High-tech Co., Ltd. has an annual production capacity of 150,000 tons of ion-exchange membrane caustic soda project. In this regard, a person in charge of the Xinfa Group explained to the CCIN reporter that, in order to ensure normal production, the alumina enterprise with a capacity of 1 million tons must have a stable supply channel for caustic soda. Even if a stable upstream supplier is found, the cost of the purchase of caustic soda will increase due to transportation. With the continuous increase in the supervision of liquid dangerous goods logistics, transportation will be more difficult. It is necessary for alumina companies to support their own chlor-alkali projects. “Our caustic soda project is adjacent to the alumina plant and will be used to transport liquid caustic soda directly to the alumina production line. This will save us more than 100 million yuan in liquid and alkaline freight per year,†said the person in charge.
Wang Haijun believes that the chlor-alkali industry in Jiangsu Province has always been based on chlor-alkali. Through years of development, it has formed a series of chlorine product industry chains such as ethylene process vinyl chloride, polyvinyl chloride, methane chloride, and pesticides. The demand for chlorine is large. The Jiangsu chemical fiber, textile, printing and dyeing, pharmaceutical, machinery, electronics and other industries are quite developed, and there is also a continuous demand for caustic soda. The start-up of new production capacity in Jiangsu Province can increase the production of **, reduce outsourcing and satisfy the province's demand for caustic soda.
There is also a reason for the transformation.
“We are trying to eliminate the diaphragm base and upgrade the installation.†The company’s head of a company planning to start production of an annual capacity of 200,000 tons of ion-exchange membrane caustic soda in November this year explained the reasons for their expansion. According to him, the diaphragm alkali process is backward, energy consumption is high, product quality is poor, and emissions from the “three wastes†are large. The ion-exchange membrane caustic soda has the advantages of advanced technology, low energy consumption, high product purity, and low emission of “three wastesâ€.
The person in charge of Wuhan Xianglong Electric Co., Ltd. introduced to the CCIN reporter that after their 100,000 tons/year diaphragm alkali device was converted to ionized membrane alkali, the energy consumption per ton could be reduced by about 57%, and the amount of wastewater generated could be reduced by 96%. The cost per ton of alkali can be reduced by about 22%. Energy saving, environmental protection, and economic benefits are significant.
One of the best reasons is the availability of resources.
The main raw materials for chlor-alkali production are coal, electricity, salt, and limestone. The possession of these resources has become the reason for many companies to expand production. A 150,000-ton/year caustic soda plant of Zaozhuang Zhongke Chemical Co., Ltd. under Shandong Zhongtai Coal Co., Ltd. will be put into operation in October. A person in charge of the company's pre-project investigations briefed the CCIN reporter that Zaozhuang had no caustic soda project and Zaozhuang was an industrial city. The annual consumption of caustic soda and quinones was large. If you travel from Weifang and Zibo, you have a distance of 400 kilometers. The caustic soda and ** are hazardous chemicals and it is not safe to transport them over long distances. Since there are markets in the market for products, Zhongtai Coal has coal and electricity resources, so Zaozhuang has conditions for caustic soda production.
Wu Yinping, general secretary of the Chlor-alkali Industry Association of Wuhai City, Inner Mongolia, spoke of the reasons for the frequent implementation of local caustic soda projects in the past two years. He stated that Wuhai's limestone resources are very rich, and its high grade, low price, and high calcium carbonate content are convenient for the production of calcium carbide. . Wuhai City is now an important calcium carbide production base in China. The calcium carbide process can be used to produce polyvinyl chloride, and supporting caustic soda projects.
Xinjiang Zhongtai Chemical Co., Ltd. is planning to build a 400,000-ton/year PVC and 300,000-ton/year caustic soda project in Fukang Industrial Park in Xinjiang. A person in charge of the company said when he talked about the reasons for the expansion: “We have open-pit salt mines, and the prices of coal and electricity are also lower than the national average prices.â€
Insightful people cannot live with a single resource
So, can the reasons for these companies stand still? The CCIN reporter found through interviews that many people of insight did not agree with the company’s practice of disregarding the market for its resources only, disregarding the long-term perspective, and ignoring the periphery.
With alkali companies for "self-use" grounds, supporting the launch of caustic soda project, whether it can really improve and optimize its own industrial chain? Zhang Xin, deputy director of the Technical Department of the China Chlor-Alkali Industry Association, told CCIN reporters that there are some problems with alumina companies and other downstream companies supporting their own caustic soda projects. When the alumina market is good, increasing the production of caustic soda can meet the demand for alumina production, but the storage and handling of hazardous products is also a big problem; if the alumina market is not good, the caustic soda device can only Idle. The more realistic problem is that the downstream companies' self-supporting caustic soda projects will aggravate the overcapacity contradiction in the caustic soda industry. The realistic approach is to complement the upstream chlor-alkali enterprises with downstream alumina companies.
The reason for the transformation is also questioned by the industry. Yang Xiuling, deputy general manager of Shandong Xinlong Electrification Group, believes that the transformation should be equivalent replacement. In addition, there is no point in reconstructing a small-scale project. Many people in the industry believe that although ion-exchange membrane technology represents the development direction of caustic soda, it is also necessary to decide whether the transformation and expansion of production will be based on regional location, its own comprehensive advantages, and supporting resources. At present, chlor-alkali enterprises with self-provided power stations in China only account for one-third of the total number of enterprises. Without self-contained power, the cost of electricity for enterprises will be very high, and it may lose the significance of technological transformation.
For the reason of resources, many people in the industry also expressed their opinions. "There is no reason why resources can be used to expand production. Because the chlor-alkali market is already saturated, if the market can't be digested if it is expanded, it would be a waste of resources and redundant construction." Chief Engineer, Kaifeng Dongda Chemical Co., Ltd., Pingdingshan Group Cao Wenzhi said to CCIN reporters. Zhang Xin also said that having a single resource should not be the reason for launching the project because it is dangerous. Chlor-alkali should be developed in the direction of coal, electricity, salt, and chemical integration, and it must have coal, electricity, salt, and chemical resources, but also consider logistics, geographical, and other advantages. Some experts point out sharply that according to China's current resource management system, it is not so much the company’s own resources as the local government has the resources. The reason why these companies can own resources is obviously the strong support of the local government. This shows that the root cause of blind expansion is in local governments. Local governments not only play against the central government, but also with the market.
There are also many people in the industry believe that it should take practical and feasible measures to resolutely stop the limelight in the blind expansion of chlor alkali productivity.
Some insiders suggested that regional restrictions be imposed on areas where expansion of production is too aggressive. For example, caustic soda production capacity in Weifang and Zibo accounted for 50% of the production capacity in Shandong Province. There are 9 enterprises in Guangweifang. Such areas should implement regional restrictions.
There are also industry sources, the chlor-alkali industry currently needs to optimize the industrial layout. Zhang Wenlei, secretary-general of the China Chlor-Alkali Industry Association, said in an interview with CCIN reporters that the chlor-alkali project that was launched could not be based on a single resource but based on comprehensive resources. The project of launching the eastern region needs an industrial chain that consumes chlorine and hydrogen, and has the advantage of a port. However, in principle, no new calcium carbide process polyvinyl chloride plant should be built. It is necessary to encourage the development of large-scale ethylene oxychlorination plants and the multiple use of supporting chlorine resources by relying on the advantages of the new ethylene projects in the surrounding areas and the convenience of importing vinyl raw materials from ports. The Western Region projects must have the advantages of electricity, and should give full play to the functional advantages of the regional chemical parks. He believes that the chlor-alkali industry needs to be developed, and it is necessary to encourage strong alliances and integrated upstream and downstream operations, improve resource allocation efficiency, and increase industry concentration.
Already 10 million tons surplus will expand 10 million tons
According to the statistics of the relevant industry associations, the caustic soda production capacity of the main product of the chlor-alkali industry in China has doubled in the five years since 2004 and has become the world's largest. China's existing production capacity of caustic soda is 27.93 million tons, while the apparent consumption is only 17.22 million tons, and the export volume is 1.53 million tons. The production capacity has exceeded 10 million tons, which is a large surplus.
The overcapacity has brought a great negative impact on the industry. The most obvious effect is the lack of start-up, and the price is difficult to rise. Wang Haijun, senior economist of the sales management office of Jiangsu Anbang Electrochemical Company, told the CCIN reporter that currently, 32% of ionized membranes are sold in Jiangsu at a market price of RMB 400/ton, and the production cost is as high as RMB 450/ton. It is understood that after the Mid-Autumn Festival in eastern China's Jiangsu and Zhejiang regions, caustic soda prices fell 30 to 40 yuan / ton.
The low price shocks have caused most companies to lose money. China Chlor-Alkali Industry Association statistics on 77 key enterprises in the industry show that from January to June this year, 23 companies have suffered losses, with a loss of 29.9%.
According to CCIN reporters, despite the fact that the production of main products downstream of caustic soda has shown a different degree of growth than the financial crisis, it is still insufficient compared to the domestic supply of large amounts of caustic soda and has not formed effective support for the price of caustic soda. At the same time, the export disruption caused by the decline in overseas demand has continued since 2009 and has not seen any significant improvement. Many industry insiders predict that the domestic chlor-alkali production capacity will remain in the long-term. This will also be the biggest problem facing the industry.
Although the domestic chlor-alkali market is in a sluggish state due to overcapacity, according to planning statistics in various aspects, the domestic capacity for newly-built caustic soda projects in the first half of this year will still reach 2.975 million tons, and will continue to increase production capacity by 3 million tons in the second half of this year. If these planning projects can be put into operation smoothly, it is expected that the newly added caustic soda production capacity will reach 5.97 million tons this year. According to the long-term planning of the localities, the domestic caustic soda production capacity will increase by 10.405 million tons in the next three years!
Shandong is a large chlor-alkali producing province and its production capacity accounts for more than one-third of the country's total. According to CCIN reporters, the new capacity in the province in the second half of this year will be at least 1.24 million tons. Jiangsu Huai'an, Changzhou Jintan, and Xuzhou Fengxian have rich underground salt mines and are close to the largest market in East China. Therefore, there are many local chlor-alkali enterprises. According to the CCIN reporter, in the second half of this year, the capacity of the three expansion projects will be nearly 600,000 tons. In recent years, new chlor-alkali installations in China have been gradually concentrated in resource-intensive western regions. According to preliminary statistics, the production capacity of new caustic soda production in Inner Mongolia will reach 5 million tons this year and next year.
In addition, the scale of expansion of chlor-alkali enterprises in Shanxi and Hebei are all in the hundreds of thousands of tons and even millions of tons.
There is reason to expand their respective resources are still palm treasure
The CCIN reporter learned that these chlor-alkali companies that have expanded their production have their own reasons for expanding production.
One reason is for personal use.
Alumina is a major downstream area of ​​caustic soda. The amount of caustic alkali consumed by single-ton alumina is 100-130 kg. Shandong is the most rapidly developing area of ​​the alumina industry. The CCIN reporter found that, in order to ensure upstream resources, alumina companies in Shandong Province have recently started to invest in chlor-alkali projects. Weiqiao Venture Group, one of the main companies in electrolytic aluminum, and Liaocheng Xinfa Group all invested in the caustic soda project. Dongying Jinmao Aluminum High-tech Co., Ltd. has an annual production capacity of 150,000 tons of ion-exchange membrane caustic soda project. In this regard, a person in charge of the Xinfa Group explained to the CCIN reporter that, in order to ensure normal production, the alumina enterprise with a capacity of 1 million tons must have a stable supply channel for caustic soda. Even if a stable upstream supplier is found, the cost of the purchase of caustic soda will increase due to transportation. With the continuous increase in the supervision of liquid dangerous goods logistics, transportation will be more difficult. It is necessary for alumina companies to support their own chlor-alkali projects. “Our caustic soda project is adjacent to the alumina plant and will be used to transport liquid caustic soda directly to the alumina production line. This will save us more than 100 million yuan in liquid and alkaline freight per year,†said the person in charge.
Wang Haijun believes that the chlor-alkali industry in Jiangsu Province has always been based on chlor-alkali. Through years of development, it has formed a series of chlorine product industry chains such as ethylene process vinyl chloride, polyvinyl chloride, methane chloride, and pesticides. The demand for chlorine is large. The Jiangsu chemical fiber, textile, printing and dyeing, pharmaceutical, machinery, electronics and other industries are quite developed, and there is also a continuous demand for caustic soda. The start-up of new production capacity in Jiangsu Province can increase the production of **, reduce outsourcing and satisfy the province's demand for caustic soda.
There is also a reason for the transformation.
“We are trying to eliminate the diaphragm base and upgrade the installation.†The company’s head of a company planning to start production of an annual capacity of 200,000 tons of ion-exchange membrane caustic soda in November this year explained the reasons for their expansion. According to him, the diaphragm alkali process is backward, energy consumption is high, product quality is poor, and emissions from the “three wastes†are large. The ion-exchange membrane caustic soda has the advantages of advanced technology, low energy consumption, high product purity, and low emission of “three wastesâ€.
The person in charge of Wuhan Xianglong Electric Co., Ltd. introduced to the CCIN reporter that after their 100,000 tons/year diaphragm alkali device was converted to ionized membrane alkali, the energy consumption per ton could be reduced by about 57%, and the amount of wastewater generated could be reduced by 96%. The cost per ton of alkali can be reduced by about 22%. Energy saving, environmental protection, and economic benefits are significant.
One of the best reasons is the availability of resources.
The main raw materials for chlor-alkali production are coal, electricity, salt, and limestone. The possession of these resources has become the reason for many companies to expand production. A 150,000-ton/year caustic soda plant of Zaozhuang Zhongke Chemical Co., Ltd. under Shandong Zhongtai Coal Co., Ltd. will be put into operation in October. A person in charge of the company's pre-project investigations briefed the CCIN reporter that Zaozhuang had no caustic soda project and Zaozhuang was an industrial city. The annual consumption of caustic soda and quinones was large. If you travel from Weifang and Zibo, you have a distance of 400 kilometers. The caustic soda and ** are hazardous chemicals and it is not safe to transport them over long distances. Since there are markets in the market for products, Zhongtai Coal has coal and electricity resources, so Zaozhuang has conditions for caustic soda production.
Wu Yinping, general secretary of the Chlor-alkali Industry Association of Wuhai City, Inner Mongolia, spoke of the reasons for the frequent implementation of local caustic soda projects in the past two years. He stated that Wuhai's limestone resources are very rich, and its high grade, low price, and high calcium carbonate content are convenient for the production of calcium carbide. . Wuhai City is now an important calcium carbide production base in China. The calcium carbide process can be used to produce polyvinyl chloride, and supporting caustic soda projects.
Xinjiang Zhongtai Chemical Co., Ltd. is planning to build a 400,000-ton/year PVC and 300,000-ton/year caustic soda project in Fukang Industrial Park in Xinjiang. A person in charge of the company said when he talked about the reasons for the expansion: “We have open-pit salt mines, and the prices of coal and electricity are also lower than the national average prices.â€
Insightful people cannot live with a single resource
So, can the reasons for these companies stand still? The CCIN reporter found through interviews that many people of insight did not agree with the company’s practice of disregarding the market for its resources only, disregarding the long-term perspective, and ignoring the periphery.
With alkali companies for "self-use" grounds, supporting the launch of caustic soda project, whether it can really improve and optimize its own industrial chain? Zhang Xin, deputy director of the Technical Department of the China Chlor-Alkali Industry Association, told CCIN reporters that there are some problems with alumina companies and other downstream companies supporting their own caustic soda projects. When the alumina market is good, increasing the production of caustic soda can meet the demand for alumina production, but the storage and handling of hazardous products is also a big problem; if the alumina market is not good, the caustic soda device can only Idle. The more realistic problem is that the downstream companies' self-supporting caustic soda projects will aggravate the overcapacity contradiction in the caustic soda industry. The realistic approach is to complement the upstream chlor-alkali enterprises with downstream alumina companies.
The reason for the transformation is also questioned by the industry. Yang Xiuling, deputy general manager of Shandong Xinlong Electrification Group, believes that the transformation should be equivalent replacement. In addition, there is no point in reconstructing a small-scale project. Many people in the industry believe that although ion-exchange membrane technology represents the development direction of caustic soda, it is also necessary to decide whether the transformation and expansion of production will be based on regional location, its own comprehensive advantages, and supporting resources. At present, chlor-alkali enterprises with self-provided power stations in China only account for one-third of the total number of enterprises. Without self-contained power, the cost of electricity for enterprises will be very high, and it may lose the significance of technological transformation.
For the reason of resources, many people in the industry also expressed their opinions. "There is no reason why resources can be used to expand production. Because the chlor-alkali market is already saturated, if the market can't be digested if it is expanded, it would be a waste of resources and redundant construction." Chief Engineer, Kaifeng Dongda Chemical Co., Ltd., Pingdingshan Group Cao Wenzhi said to CCIN reporters. Zhang Xin also said that having a single resource should not be the reason for launching the project because it is dangerous. Chlor-alkali should be developed in the direction of coal, electricity, salt, and chemical integration, and it must have coal, electricity, salt, and chemical resources, but also consider logistics, geographical, and other advantages. Some experts point out sharply that according to China's current resource management system, it is not so much the company’s own resources as the local government has the resources. The reason why these companies can own resources is obviously the strong support of the local government. This shows that the root cause of blind expansion is in local governments. Local governments not only play against the central government, but also with the market.
There are also many people in the industry believe that it should take practical and feasible measures to resolutely stop the limelight in the blind expansion of chlor alkali productivity.
Some insiders suggested that regional restrictions be imposed on areas where expansion of production is too aggressive. For example, caustic soda production capacity in Weifang and Zibo accounted for 50% of the production capacity in Shandong Province. There are 9 enterprises in Guangweifang. Such areas should implement regional restrictions.
There are also industry sources, the chlor-alkali industry currently needs to optimize the industrial layout. Zhang Wenlei, secretary-general of the China Chlor-Alkali Industry Association, said in an interview with CCIN reporters that the chlor-alkali project that was launched could not be based on a single resource but based on comprehensive resources. The project of launching the eastern region needs an industrial chain that consumes chlorine and hydrogen, and has the advantage of a port. However, in principle, no new calcium carbide process polyvinyl chloride plant should be built. It is necessary to encourage the development of large-scale ethylene oxychlorination plants and the multiple use of supporting chlorine resources by relying on the advantages of the new ethylene projects in the surrounding areas and the convenience of importing vinyl raw materials from ports. The Western Region projects must have the advantages of electricity, and should give full play to the functional advantages of the regional chemical parks. He believes that the chlor-alkali industry needs to be developed, and it is necessary to encourage strong alliances and integrated upstream and downstream operations, improve resource allocation efficiency, and increase industry concentration.
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