[Haichuan Chemical Engineering News] China’s first adiponitrile project, Tianchen Qixiang, has commenced construction
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On the morning of August 19, China’s first adiponitrile project – the Tianchen Qixiang 1 million tons per year nylon new materials industrial base – officially commenced construction. The industrial base is located in the Zibo Qilu Chemical Industry Zone and includes a production facility with an annual capacity of 500,000 tons of adiponitrile; once completed, it is expected to become the first industrial production base for adiponitrile in China. This is less than a month since Qixiang Tengda and Sinochem announced their partnership. Regarding the implementation of this project, Yuan Xuemin, Party Secretary and Chairman of China Tianchen Engineering Co., Ltd., said, “During the site-selection process, we visited nearly 20 chemical parks across the country; we are glad to be able to work together with Qixiang Tengda.” An analyst in the chemicals sector at a large securities firm said, “It’s clear that both parties involved want to accelerate the implementation of the project and bring the products to the market as soon as possible.” As one of the partners, Qixiang Tengda can not only share in the profits generated by the project but also make better use of its existing production capacity, reaping multiple benefits as a result. Breaking foreign technological monopolies: On the evening of July 25, Qixiang Tengda announced that Tianchen Qixiang New Materials Co., Ltd., in which it has an interest, is investing in the construction of a new materials production facility for nylon 66 with an annual output of 1 million tons, in two phases. Just 3 weeks later, the construction of the industrial base officially began; such rapid progress and high efficiency are truly rare in the industry. Project information indicates that the planned scale of this industrial base is an annual production of 1 million tons of new nylon materials, 500,000 tons of hexamethylenediamine, and 500,000 tons of hexanitronic acid, with 500,000 tons of acrylonitrile produced as a by-product. Adiponitrile is a key intermediate in the production of PA66 (commonly known as nylon 66), and it is referred to in the market as the \"throat of the nylon industry chain\". Currently, the global production capacity for adiponitrile is around 2 million tons, with most of it concentrated in four companies: Invista, Oxyden, BASF (including Solvay), and Asahi Kasei. Among them, Nvidia accounts for over 50%, and it is also the only manufacturer that sells hexamethylenedinitrile in large quantities overseas. Due to the high technical barriers and investment requirements, there is a severe mismatch in China’s \"adiponitrile-adipamide-nylon 66\" industry chain. Global consumption of nylon 66 is concentrated in China, yet China is entirely dependent on imports for adiponitrile, which means its pricing is controlled by others. Once the Tianchen Qixiang 1 million tons per year nylon new materials industrial base is completed, it will break the foreign technological monopoly and fill the gaps in domestic technology and industry. Jiao Zaiyue, Deputy Secretary of the Party Committee and General Manager of China Tianchen Engineering Co., Ltd., said that the Tianchen Qixiang project utilizes a technology for synthesizing adiponitrile via the butadiene method, which was developed independently; it is also a patented technology with independent intellectual property rights, the first of its kind in China. In September 2015, this technology passed the evaluation of scientific and technological achievements organized by the China Petroleum and Chemical Industry Federation, and the product reached an advanced level comparable to that of international counterparts. As the project site is located adjacent to Qixiang Tengda, it will enable full use of Qixiang Tengda’s synergistic advantages in terms of the supply of raw materials such as butadiene and the provision of park-based public facilities. This will ensure a stable supply of raw materials for the nylon new materials industry base, which is highly beneficial for cost control.
The bottleneck in the nylon industry chain: Adiponitrile is a key intermediate in the production of PA66 (commonly known as nylon 66). It is primarily used to manufacture the diamine intermediate for nylon, with about 90% of adiponitrile being utilized in the production of nylon 66. Due to its high strength, temperature resistance, heat resistance, and excellent electrical insulation properties, nylon 66 is widely used in various applications such as engineering plastics, automotive components, mechanical parts, electrical components, industrial fibers, and consumer fibers. However, due to high technical barriers and investment requirements, the industry concentration in adiponitrile is also very high. Currently, the global production capacity for adiponitrile is 1.845 million tons, with it being concentrated in four companies: Invista, Osram, BASF (including Solvay), and Asahi Kasei. Among them, Nvidia accounts for over 50%, and it is also the only manufacturer that sells hexamethylenedinitrile in large quantities overseas. According to estimates from adiponitrile producers, a market shortage of around 165,000 tons of adiponitrile may arise in the future as the industry develops. It can be said that adiponitrile has long become the bottleneck of the entire industrial chain and the most vulnerable link. In our country, the industry chain for \"adiponitrile-adipamide-nylon 66\" faces an even more awkward reality: severe oligopoly monopolies, strict technological restrictions, complete reliance on imports, and pricing determined by others. In 2018, China’s imports of adiponitrile amounted to 293,000 tons, representing a 7.7% increase on a year-on-year basis. Meanwhile, the demand for nylon 66 remained strong; its consumption in 2018 was 520,000 tons, representing a 9% increase on a year-on-year basis. Of this amount, 270,000 tons were imported, resulting in a high degree of dependence on imports of 36%. In 2018, the prices of hexamethylenediamine and nylon 66 chips once exceeded 80,000 yuan per ton and 40,000 yuan per ton respectively, with increases of 2.5 times and 1 time on account of that. However, due to being constrained by the key raw material adiponitrile, the distribution of profits along the industrial chain remains in the hands of foreign upstream companies. The market predicts that in 2020, China’s consumption of adiponitrile will reach 380,000 tons, of which approximately 357,000 tons will be used for the production of nylon 66.
Breakthrough achieved in localizing technology The huge demand in the Chinese market has spurred manufacturers both at home and abroad to take action. In fact, efforts to localize the production of adiponitrile have never ceased, but due to the extremely high technical and financial barriers, no manufacturers have yet emerged to truly challenge the existing monopoly situation. In the 1970s, the Liaoyang branch of CNPC introduced a catalytic ammonolysis process capable of producing adiponitrile at a rate of 20,000 tons per year; however, it was shut down in 2002 due to high costs. In August 2015, Shandong Runxing Chemical attempted to produce 100,000 tons per year of adiponitrile using its own technology; an explosion occurred during the trial production phase, and there are still no plans to restart this project to date. After numerous unsuccessful attempts, a breakthrough has finally been achieved in the localization of dinitrile production technology. Public information shows that the \"technology for synthesizing adiponitrile through direct hydrocyanation of butadiene\", developed independently by China Tianchen Engineering Co., Ltd., passed the evaluation for scientific and technological achievements by the China Petroleum and Chemical Industry Federation in 2015, and has received multiple invention patent approvals. Tianchen Qixiang was established jointly by Qixiang Tengda, China National Chemical Corporation Engineering Co., Ltd. (hereinafter referred to as “China National Chemical Group”), and its subsidiary China Tianchen Engineering Co., Ltd. (hereinafter referred to as “China Tianchen”). Qixiang Tengda’s announcement states that the production technology for adiponitrile has long been monopolized by foreign companies. Through years of research and development, China Tianchen has fully mastered the production parameters and process criteria for converting adiponitrile into nylon 66, and has successfully produced qualified products using experimental facilities.
Seizing the Opportunity in 2023: While efforts are being made to localize the production of adiponitrile in China, international giants in this field have also begun to make strategic moves. In February this year, Invidia and the Shanghai Chemical Industry Park (SCIP) signed a memorandum of understanding to initiate the design work for a production facility capable of producing 400,000 tons of adiponitrile (ADN). The investment required is expected to exceed 1 billion dollars (7 billion yuan), with construction set to begin in 2020 and operation to start in 2023. This is likely to be the largest investment project in Nvidia’s history. Coincidentally, a statement issued by China Chemical (601117), a subsidiary of Sinochem Group, indicates that the planned construction period for Tianchen Qixiang’s first phase of projects is 3 years, with full operation starting in the fourth year. In terms of the time of launch, both parties have set 2023 as the target date. But for the market, the first domestic industrial nylon 66 plant with a complete industrial chain is on the horizon, and it seems less important who takes the lead. An analyst in the chemicals sector at a major securities firm believes that “the cooperation between Sinochem Group and Qixiang Tengda represents a significant step forward in the localization of adiponitrile production in China.” The success of this project will help to break the pricing power of foreign manufacturers, exerting a significant positive impact on China’s nylon industry. ” “Backed by the powerful Cedar Holdings, Qixiang Tengda has ample financial resources. By partnering with Sinochem Group, both parties possess the necessary technical expertise as well as financial support, which increases the chances of success in establishing a caprolactam production base. ” The aforementioned chemical industry analyst said, “Furthermore, as of now, no company in the A-share market possesses the production technology for adiponitrile.” Given the complexity of the adiponitrile production process, it is likely that no new competitors will emerge in the adiponitrile industry in the next 2-3 years, or even for a longer period of time. ”
After four years, there may be a surplus of adiponitrile as various provinces strive to achieve local production of this substance. On July 23, companies, research institutions, and universities in provinces such as Shandong, Henan, Anhui, Shaanxi, Shanxi, Chongqing, and Zhejiang are working hard to develop domestic production technologies for adiponitrile. On the morning of February 20, Invista, one of the world’s largest producers of chemical intermediates and polymers, signed a memorandum of understanding with the Shanghai Chemical Industry Park to start planning the construction of a production facility capable of producing 400,000 tons per year of adiponitrile. Construction is set to begin in 2020, with production starting in 2022; this will fill the gap in domestic adiponitrile production. Invista estimates that once the facility is operational, it will be able to meet all of China’s demand for adiponitrile as a raw material. In other words, after four years, there could be an equilibrium between supply and demand for adiponitrile, or even a surplus, posing challenges to the efforts to achieve local production. Nylon 66 is a thermoplastic resin that appears as a white solid; it has a density of 1.14, a melting point of 253°C, and is insoluble in common solvents. It possesses high mechanical strength and hardness as well as great rigidity, making it suitable for use in automotive air supply systems, filtration and cooling systems. It can also be used for components such as pedals and door handles inside vehicles. Today, this material is being used in an increasingly wide range of applications, especially in electronic products. Adiponitrile is an intermediate used in the production of nylon 66. Due to its lightweight and high-strength properties, nylon 66 is employed in areas such as engineering plastics, airbag fabrics, high-performance coatings, and special-purpose textile fibers. PA66 is produced by the reaction of adipic acid and hexamethylenediamine, which itself is obtained through the hydrogenation of adiponitrile. As the most important raw material for PA66, advanced production technologies for adiponitrile are currently monopolized by European and American companies such as Invista and Oxyden. China does not yet have any facilities for producing adiponitrile and relies entirely on imports. In February 2018, Solvay announced that the adiponitrile production facility at its plant in France was affected by force majeure due to strikes. In June 2018, BASF declared that its supply of hexamethylenediamine, 66 salts, and P66 was impacted by electrical failures. Alone in the past year, there were more than 10 disruptions in the supply of adiponitrile. The operating levels of adiponitrile production facilities abroad had a domino effect on the domestic supply chain for adiponitrile, hexamethylenediamine, and nylon 66; the shutdown of these production facilities led to a sharp rise in the price of PA66. Between January 2018 and January 2019, the average price of nylon 66 increased by nearly 50%. The development of nylon production in China is severely constrained by the availability and price of adiponitrile, with the production technology related to adiponitrile acting as a bottleneck for the growth of nylon production in this country.
The main methods for synthesizing adiponitrile at present include the electrolytic dimerization of acrylonitrile (AN), direct hydrocyanation of butadiene, and catalytic amination of adipic acid (ADA). In the direct hydrocyanation method using butadiene, two molecules of hydrogen cyanide (HCN) react with butadiene in the presence of a catalyst composed of zero-valent nickel and phosphorus-containing ligands. The electrolytic synthesis of adiponitrile from acrylonitrile requires a large amount of electricity; approximately 3,000–4,000 kW·h of electrical energy is needed to produce 1 ton of adiponitrile. This method imposes high requirements on the operating conditions. Factors such as the choice of electrode material, the formulation of the electrolyte, the electrolysis temperature during the reaction, the feed concentration of acrylonitrile, the current density, and changes in the acidity or alkalinity of the solution can all affect the selectivity of the reaction； The ammonolysis process for adipic acid involves a long sequence of steps, high energy consumption, numerous by-products, relatively low yield of the product, and poor quality. On the path to localizing the production technology for adiponitrile, we encountered exploration efforts and failures. In 2015, Shandong Runxing Chemical Technology Co., Ltd. undertook efforts to localize this production technology and built China’s first adiponitrile production facility with an annual capacity of 100,000 tons. On August 22, an explosion occurred during the pilot production of this facility, triggering a fire that resulted in 1 death and 9 injuries. According to the conclusions reached by the investigation team, the direct cause of the accident was an explosion resulting from a mixture of gases such as acrylonitrile and hydrogen, which had reached an explosive concentration in the gas space above the decanter, triggered by an electrostatic discharge. Subsequently, the Shandong Provincial Work Safety Supervision Bureau issued a notice ordering the revocation of the safety approval documents for the hazardous chemical construction projects, namely Lu An Jian Wei Hua Project Shen Zi No. 67 and Lu An Jian Wei Hua Project Shen Zi No. 80, issued by that bureau.
Technologically, one has to make breakthroughs on their own; otherwise, there will be bottlenecks
The efforts in China to develop domestic production technologies for adiponitrile have not ceased. Currently, multiple enterprises in various provinces and cities are carrying out or about to carry out pilot tests using three different processes for the production of adiponitrile. The process of producing adiponitrile via direct hydrocyanation of butadiene features a short production pathway, low pollution levels, and low energy consumption, making it suitable for large-scale production; overall, it is considered a relatively ideal process. In China, pilot tests are also being conducted primarily using this butadiene hydrocyanation approach. The technical challenges lie in the need to use highly toxic and volatile hydrogen cyanide (HCN) as a raw material, as well as the fact that catalysts are prone to hydrolysis and oxidation. There are also numerous isomers of the resulting products, and high standards are required for their separation and purification. This entire process demands high standards regarding production equipment, operational procedures, and safety management. The main technical challenge remains the selection and development of appropriate catalysts, including phosphorus-containing ligands, in order to maximize the selectivity and yield of the main product, 3-pentenecarbonitrile, while minimizing the production of 2-methyl-3-butenecarbonitrile. The pilot plant for the butadiene hydrocyanation process began to be built and operated 5 years ago. However, to date, the technical barriers have not been overcome. As the world’s largest producers of adiponitrile, Ascend and Invista have, through years of optimization and improvement of the plant’s operations, continued to enhance their technologies, resulting in lower energy consumption and production costs. The technological gap between these domestic and international giants is thus widening. On May 23, 2018, Invista announced that its $250 million project in Victoria had reached the final design stage. This project aims to upgrade the technology used for producing adiponitrile; with these improved technologies, Invista will be able to achieve higher production levels of adiponitrile while simultaneously reducing energy consumption, greenhouse gas emissions, improving process stability, and decreasing capital intensity. As one of the world’s largest producers of nylon 66 resins, compounds, and fibers, American company Orindal announced on May 31, 2018, that it would increase its caprolactam production capacity by 220,000 tons by 2022, using its fifth-generation technology for this expansion. “With our latest fifth-generation ADN technology, we are able to increase capacity without significant downtime. ”said Phil McDivitt, President and CEO of Oshkosh. In fact, in China’s efforts to develop the hydrogen cyanation of butadiene on a domestic scale, multiple companies and research institutions have worked independently, taking the same detours without finding any way forward. Even if success is achieved in the next two years, the market may start to experience oversupply; capacity for adiponitrile–PA66 is expected to increase over the next three years, mainly in North America and China. In addition to Invista’s $1 billion investment in a 400,000-ton-per-year adiponitrile facility in Caojing, Shanghai, Ascend Industries in the United States also plans to expand its production capacity, with Ascend’s global ADN production capacity set to increase by 46% by 2022.
Currently, China consumes around 300,000 tons of adiponitrile per year. Invista estimates that over the next five years China will become the world’s largest market for nylon, and a production capacity of 400,000 tons per year of adiponitrile would be sufficient to meet China’s demand for this material. In other words, within four years, supply and demand for adiponitrile will be in balance, with even a risk of surplus. In fact, since the launch of Invista’s 150,000-ton/year nylon 66 production facility in Shanghai in the second half of 2016, domestic imports have been declining. In 2012, China imported 240,000 tons of nylon 66, while this figure rose to 300,000 tons in 2016. With the operation of that facility starting in 2016, China’s imports of nylon 66 dropped to 270,000 tons in 2017, and its reliance on imports decreased from 60% in 2012 to 39% in 2017. Currently, the operating rate of global Nylon 66 plants is around 80%, and this figure is on the rise. By 2020, global prices for Nylon 66 are likely to remain strong; however, once the new production capacity built by ADN comes online, prices for Nylon 66 may start to decline by 2022. No matter how large the value of the market market is, it remains limited. With international giants continuously improving their technologies, even if pilot-scale or industrial facilities developed using various domestic approaches succeed this year, it will still take one or two years to resolve any technical issues so that these facilities can operate efficiently on a long-term basis. Although the gap with international giants has narrowed, it still exists. Those who have partners gain an ecosystem; those who have an ecosystem gain the world. Companies in China with similar goals should come together to create and share the market opportunities.