The domestic construction chemicals market will continue to grow rapidly

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The domestic construction chemicals market will continue to grow rapidly. Volume 32, Issue 4 of «Chemical Technology Market», April 2009. According to analysts at the China Business Information Company (CBI), China’s PVC market is moving toward self-sufficiency, and there will be a surplus of supply. In 2008, China had 98 PVC production facilities, with a total production capacity of nearly 14.45 million tons per year, accounting for 32% of the world’s total capacity. However, some construction projects are on hold, and the annual growth rate of demand by 2012 will be only 4.4%. This is influenced by both the current economic crisis and the declining profitability of PVC producers using the acetylene process. PVC producers using the acetylene method are mainly located in China’s northern, central, and western regions, where there is inexpensive and abundant electricity, coal, and the raw material calcium carbide. As of the end of February 2009, lower prices for naphtha and ethylene due to falling oil prices kept PVC produced from ethylene competitive. Further consolidation in the PVC industry will lead to a reshuffle in its long-term development. In developed countries, PVC pipes account for around 70% to 80% of the market, while in China they account for only 50%. It is expected that by 2012, China’s demand for PVC pipes will grow at an annual rate of 10%, while the annual growth rate for PVC profiles will be 9%. With China’s economic stimulus plans and the acceleration of urbanization, PVC pipes and profiles are expected to continue growing rapidly. Analyses suggest that by 2012, sealants and adhesives will remain the most widely used construction chemicals, accounting for approximately 40% of the total sales in the construction chemicals industry. Admixtures for cement and asphalt will be the second largest category of construction chemicals, due to an increase in usage driven by more surface paving and higher-rise buildings. In the field of epoxy resins used in adhesives and road paving, to meet global market demands, China added some new facilities in 2008. According to customs statistics, epoxy resin imports declined by 14.2% in 2008 to 242,280 tons. On the upstream side, rising domestic production and weak market demand also led to a 8.8% decline in BPA imports, which dropped to 419,929 tons. Phenol imports declined by 19.8% year-on-year to 366,000 tons.