Please talk about the market for maleic anhydride.

All maleic anhydride in the country is produced by the oxidation of tar benzene; it has no future!

Supply exceeds demand; things are not easy! But if you have upstream or downstream products, it’s hard to say; meanwhile, having a large amount of waste heat is also a key factor for survival.

The production capacity for maleic anhydride is already in excess, so competition will surely be fierce in the future. However, the key factor lies in the process used; from a long-term perspective, the benzene-based process certainly does not have any advantages. (As more hydrogenation benzene plants come online, the supply of crude benzene will become increasingly tight, leading to higher prices; consequently, the price of cokerized benzene will also rise.) The butane-based process represents the future direction for development. Butane comes from liquefied gas, which is used as a household fuel and is subject to certain regulations. Moreover, the quality of maleic anhydride produced using the butane-based process is better than that obtained through the cokerized benzene process, and it is also much more environmentally friendly.

At present, there are over 30 anhydride production facilities in China, among which the 45,000 T/A facility at Tianjin Zhonghe Chemical Plant is the largest of such facilities in the country. In 2004, China’s total anhydride production capacity was 420,000 T/A, with a production volume of 256,000 T; in 2005 the production volume was around 300,000 T, and it is expected to reach 450,000 T by 2010. There are currently many new and expanded anhydride production projects underway – Tianjin Zhonghe Chemical Plant plans to expand its existing facility to 60,000 T/A; Suzhou Synthetic Chemical Plant intends to increase its capacity to 15,000 T/A; Hebei Huanghua Zhongjie Petrochemical Group plans to build a new facility with a capacity of 40,000 T/A using the n-butane method; Luzhou in Sichuan plans to construct a new facility with a capacity of 10,000 T/A; Quanzhou in Fujian plans to build a new facility with a capacity of 60,000 T/A; Nanjing Jinling Petrochemical Company also plans to build a new facility with a capacity of 60,000 T/A. In addition, some phthalic anhydride production facilities are set to be converted for anhydride production. If these projects are completed on schedule, China’s anhydride production capacity is expected to exceed 600,000 T/A by 2010, resulting in an oversupply of anhydride in the coming years.

The anhydride industry is currently developing rapidly, with the butane-based method for producing anhydride becoming the standard approach for new installations. Despite the sluggish market conditions for anhydride, new sources of economic growth can be found in the steam generated as a by-product of exhaust gas treatment. Assuming a plant using the benzene-based method that produces 20,000 tons per year, this could generate approximately 6 million in benefits from the steam produced each year. Both the catalytic combustion technology is currently used to treat the exhaust gases from the absorption towers in plants using the benzene-based method in Shanghai, as well as those using the butane-based method in Zhejiang. This approach not only eliminates the need for fuel but also produces large amounts of steam, resulting in significant economic and environmental benefits! For specific details, contact wangbochao@shdonghua.com