Core view
The price of adipic acid is rising, and the demand is expected to drive the boom. From the second half of 2020, the supply-demand relationship will be repaired and improved, and the price of adipic acid will rise to the current 12200 yuan / ton. Adipic acid production enterprises in China are mainly divided into two categories: 1) represented by Chongqing Huafeng and Henan Shenma, they have adipic acid downstream supporting industrial chain; 2) Taking Shandong Hualu-Hengsheng Chemical Co.Ltd(600426) as the representative, a certain cost advantage is formed through device optimization and business collaboration. At present, China plans to build adipic acid production capacity of about 2.15 million tons. Assuming that all production capacity is completed and put into operation, China's adipic acid production capacity will reach about 4.9 million tons, and the proportion of production capacity in the world will be further increased. The localization of PA66 raw material adiponitrile in the downstream of adipic acid is accelerated, and the large-scale planning of degradable plastic PBAT project is expected to be put into operation in 2023, which will significantly boost the prosperity of adipic acid industry. We believe that the demand side will continue to catalyze the high prospect of the industry, and adipic acid is expected to reach a new round of high prosperity.
New material projects are accelerated, and the gap between supply and demand of adipic acid may expand. The planned capacity of PA66 and PBAT downstream of adipic acid is huge. At present, the localization of adiponitrile preparation technology, which suppresses the large-scale production capacity of PA66 in China, has entered the stage of large-scale production capacity construction. BDO's new capacity with soaring prices in 2021 is fully planned, and it is expected that the price will fall down to promote the production of PBAT project, and the demand for adipic acid is expected to increase significantly. As there is great uncertainty in the investment and construction of the two main downstream PA66 and PBAT projects of adipic acid, we calculate the supply and demand pattern of adipic acid under the assumption of optimism, neutrality and pessimism. Under the neutral scenario, the consumption of adipic acid in China from 2022 to 2025 is 176.4/232.8/286.53263000 tons, of which the consumption of PA66 is 31.8/55.5/89.81125000 tons; The consumption of PBAT is 25.8/58.0/76.9933000 tons. The supply-demand gap of adipic acid in China from 2022 to 2025 is 6.1 / - 2.5 / - 8.146000 tons. Adipic acid is planned to have more capacity in 2022 and 2025, but less in 2023 and 2024. Downstream demand is on the contrary. 2023 and 2024 are the planned production peaks of PA66 and PBAT. We believe that adipic acid will have new production capacity in 2022, and the supply and demand will basically maintain a balance. From 2023 to 2024, with the localization of adiponitrile and the decline of raw material BDO price, the production capacity of PA66 and PBAT will be released in an orderly manner. The supply and demand of adipic acid will continue to tighten by 2023 and 2024. The industry is expected to usher in a new round of business cycle, and the upward space needs to track the production capacity release rhythm downstream of the two new material keys.
Risk warning: the new adipic acid production capacity is far higher than expected; Risk that the production progress of PBAT is less than expected; The production capacity construction of PA66 raw material adiponitrile is less than expected.
Investment suggestion: driven by the localization of key technologies and policies, the downstream new materials PA66 and PBAT of adipic acid are planned to be constructed on a large scale and are expected to be put into operation in 2-3 years, which is expected to drive the demand for adipic acid. It is suggested to pay attention to [ Huafon Chemical Co.Ltd(002064) ] with 750000 tons of adipic acid capacity and supporting PA66 industrial chain, [ Shandong Hualu-Hengsheng Chemical Co.Ltd(600426) ], 326000 tons of adipic acid capacity and 80000 tons of PA66.
