1、 Overview
Polyvinyl alcohol is a water-soluble polymer material with the general formula [C2H4O] n. Its main classification indicators are degree of polymerization and degree of alcoholysis, generally divided into 17-99, 20-99, 26-99, 17-88, 20-88, 24-88, etc. The first two positions represent degree of polymerization, and the last two positions represent degree of alcoholysis. For example, 17-99 represents degree of polymerization 1700 and degree of alcoholysis 99. Polyvinyl alcohol has excellent properties such as adhesion, fiber formation, emulsification stability, gas barrier, film-forming, biodegradability, etc. It is mainly used in the production of polymerization additives, special fibers, adhesives, safety glass interlayer films (PVB films), water-soluble films, optical films, etc. It is widely used in industries such as fine chemicals, green buildings, papermaking, fibers, automobiles, biodegradable packaging, optoelectronics, pharmaceuticals, etc.
2、 Market supply and demand
Polyvinyl alcohol was first synthesized by German chemists in 1924, and small-scale production was achieved in 1926. In 1950, it was first industrialized by the Japanese company Kurosuki Rayon. China's polyvinyl alcohol industry started in the 1960s and introduced a set of polyvinyl alcohol production lines with an annual output of 10000 tons from Japan in 1963. Subsequently, 13 polyvinyl alcohol enterprises were built in China, with a total production capacity of 200000 tons. However, due to low product quality, limited downstream application areas, low industry operating rates, and severe inventory. In the mid to late 1980s, with the continuous development of applications outside of polyvinyl alcohol, polyvinyl alcohol production enterprises showed new development vitality and successively organized the production of non fiber polyvinyl alcohol. From the mid to late 1990s to 2007, the overall market price of polyvinyl alcohol was on an upward trend, and the market supply was in short supply. The domestic polyvinyl alcohol industry underwent large-scale capacity expansion. According to statistics, the total global production capacity of polyvinyl alcohol is about 1.85 million tons, mainly concentrated in a few countries and regions such as China, Japan, and the United States. Among them, the Asia Pacific region is the main production area, accounting for more than 85% of the world's total production. The actual production of polyvinyl alcohol in the world in 2021 is about 1.25 million tons, with a capacity utilization rate of about 68%. With the increasing competition in the traditional polyvinyl alcohol product market, international giants are gradually withdrawing from the traditional polyvinyl alcohol product market and expanding downstream to produce high value-added PVA extension products. Global polyvinyl alcohol production capacity is gradually shifting to China. According to the statistics of the China Chemical Fiber Industry Association, China's polyvinyl alcohol production capacity accounts for about 60% of the world's total production capacity, making it the world's largest producer of polyvinyl alcohol. In recent years, the backward production capacity of China's polyvinyl alcohol industry has gradually withdrawn, and the overall output and operating rate have shown an increasing trend. In 2020, the total designed production capacity of polyvinyl alcohol in China was 1.096 million tons. Excluding some production capacity that had been discontinued and was inefficient and backward, the effective production capacity was about 996000 tons, and the actual production was 783000 tons, an increase of 10.0% compared to 2016. In 2021, affected by the COVID-19 and other factors, the operating rate of domestic polyvinyl alcohol industry will decline.
China is the world's leading consumer market for polyvinyl alcohol, accounting for approximately 50% of the total global consumption. In recent years, while the total consumption of polyvinyl alcohol in China has remained stable, the consumption structure has been continuously optimized, and the proportion of downstream high value-added demand has increased. According to statistics from the China Chemical Fiber Industry Association, the apparent consumption of polyvinyl alcohol in China was 6500000 tons in 2016, which increased to 696000 tons in 2017. In 2018, due to the decline in downstream industries such as building materials and construction, as well as an increase in domestic polyvinyl alcohol exports and a decrease in imports, the domestic apparent consumption decreased to 640000 tons. Since 2019, downstream market demand has stabilized and rebounded, and emerging demand has grown. The domestic apparent consumption has rebounded to 652000 tons that year; In 2020, under the influence of the COVID-19, the apparent consumption of polyvinyl alcohol in China will still grow to 684000 tons, up 4.9% year on year. In 2021, due to the decrease in domestic polyvinyl alcohol supply and the increase in export volume, the apparent consumption of polyvinyl alcohol in China decreased to 582000 tons.
In terms of demand structure, the early application field of polyvinyl alcohol in China was mainly Vinylon, and in the 1970s and 1980s, polyvinyl alcohol accounted for 70% of the consumption of Vinylon. With the continuous development of polyvinyl alcohol's applications in pulp, coatings, and other fields, coupled with the large-scale production of other synthetic fibers such as polyester and acrylic, the proportion of polyvinyl alcohol's application in polyvinyl alcohol fibers is gradually decreasing, while its consumption in other fields is continuously increasing. Among them, the application growth of polyvinyl alcohol in fields such as construction and adhesives is the most significant. According to statistics, in the domestic consumption structure of polyvinyl alcohol, polymerization additives account for 38%, fabric slurries account for 20%, adhesives account for 12%, and vinylon fibers account for 11%. Other applications are mainly concentrated in the fields of papermaking, architectural coatings, PVB, dispersants, and so on.
3、 Competitive landscape
From the perspective of market competition, according to the group's statistics, there are currently 5 domestic enterprises producing polyvinyl alcohol, including Sinopec (affiliated with Chuanwei Chemical, Ningxia Nenghua, and Shanghai Petrochemical), Wanwei High tech (affiliated with Wanwei Headquarters, Inner Mongolia Mengwei, and Guangxi Guangwei), Inner Mongolia Shuangxin Environmental Protection Materials Co., Ltd., Ningxia Dadi, and Changchun Chemical. In 2020, Wanwei High tech's total production capacity of polyvinyl alcohol was 310000 tons, accounting for 31.1% of the industry's total production capacity; Sinopec's subsidiaries Chuanwei Chemical, Shanghai Petrochemical, and Ningxia Nenghua have a total production capacity of 306000 tons of polyvinyl alcohol, accounting for 31% of the industry's total production capacity; Inner Mongolia Shuangxin Environmental Protection Materials Co., Ltd., Ningxia Dadi, and Changchun Chemical's polyvinyl alcohol production capacity are 130000 tons, 130000 tons, and 120000 tons respectively, with a total production capacity accounting for 38%. After multiple rounds of integration, the concentration of the domestic polyvinyl alcohol industry is relatively high, and the advantages of leading enterprises are highlighted.
4、 Development trends
1. The expansion of demand combined with the clearance of production capacity has led to a continuous increase in the industry's prosperity
With the development of social economy and the expansion of downstream application fields of PVA, the demand for PVA in China has steadily increased in recent years, especially for special PVA products. The first round of integration in the domestic PVA industry on the supply side has been basically completed, and small and medium-sized production capacity has exited. The production and sales of major manufacturers in the industry are becoming increasingly rational. With the expansion and upgrading of the demand side and the continuous optimization of the supply side, the supply and demand of the polyvinyl alcohol market are gradually balanced, prices are stable and rising, and the industry prosperity is continuously improving, achieving benign development. This provides a good industry environment for enterprises in the industry to deepen technological innovation and develop high value-added PVA products.
2. Downstream application areas continue to expand, and high-end products gradually achieve import substitution
At present, polyvinyl alcohol products in China are still mainly conventional products, and special performance polyvinyl alcohol products with high added value mainly rely on imports. The homogenization competition among domestic PVA enterprises is fierce, and the import substitution of high-end products and the expansion of the international market have become inevitable trends for the future development of domestic PVA enterprises.
3. Strict environmental control, promoting industry integration and transformation and upgrading
In recent years, the national environmental control efforts have continued to increase, environmental policies have become stricter, and the environmental investment and regulatory pressure in the PVA industry have increased. At present, the integration of the domestic PVA industry has been basically completed, and backward production capacity and weak enterprises have basically exited. In the future, the industry will accelerate its transformation towards high added value and green environmental protection. The advantages of leading enterprises with strong R&D capabilities, advanced technology, long industrial chains, low costs, and good benefits in the industry will be further highlighted, and the industry concentration of PVA and downstream industries is expected to further increase.
