Global Maleic Anhydride Market Outlook

Global Maleic Anhydride Market Outlook
ECT Center (ECTC) analyzed the global production of maleic anhydride, structure of MA import and consumption in Russia, and possibilities of increase of market capacit.
Maleic anhydride is used in the production of unsaturated polyester resin as well as in the manufacture of pharmaceutics and agricultural products.

Currently, MA is not produced in Russia. According to customs statistics, the import of maleic anhydride is about 5-6 000 tons per year. The average border price of MA is 105-110 RUR/kg (1.58-1.65 USD/kg) including customs duties and VAT. For Russian consumers the price of maleic anhydride with transportation costs included is from USD 1.75 to USD 2.89 per kg, including VAT.

According to the governement import substitution policy concerning replacing important chemical products, it is planned to completely switch to own production of maleic anhydride until 2020. Currently, SIBUR PJSC is developing projects (the most elaborated one), as well as Tatneft JSC, Kamatec LLC, and State Corporation Rostec.

The key point in MA production is that it becomes profitable with annual production rate 30-45 thousand tons. However, the supply outstrips Russian domestic demand. Consequently, the development of export channels is necessary.

Maleic anhydride Russian and global market overview

In 2017, the global production of maleic anhydride was estimated at 1.8 mln. tons. By 2022, the market is expected to reach 2.2 mln. tons with a CAGR of 3.69%. In 2017, the MA market reached USD 2.4 billion in terms of revenue, and is expected to exceed USD 3.2 billion by 2022 with a CAGR of 5.96%.
Структура импорта (в натуральном выражении) по видам изоцианатов за 2017 год
World production of maleic anhydride in 2015-2017 and production forecast up to 2022
The market is driven primarily by the increasing global demand for unsaturated polyester resins in the automotive and lubricant industries. China annually increases the production capacity of polyester resins.
The major players in the global maleic anhydride market are
  • Huntsman International LLC. (USA),
  • Changzhou Yabang Chemical Co. Ltd. (China),
  • Zibo Qixiang Tengda Chemical Co., Ltd., (China),
  • Ningbo Jiangning Chemical Co., Ltd., (China),
  • Lanxess AG (USA), Polynt S.p.A. (Italy),
  • Thirumalai Chemicals Ltd. (India),
  • Ashland Inc. (USA),
  • Flint Hills Resources, LLC (USA),
  • Nippon Shokubai Co., Ltd. (Japan),
  • Mitsubishi Chemical Corporation (Japan),
  • Bartek Ingredients Inc. (Japan),
  • Bluestar Harbin Petrochemical Corp. (China),
  • Jiangsu Yabang Group (China), Bohai Chemicals (China),
  • Sasol-Huntsman GmbH & Co. KG (Germany).
On the basis of raw material, the global maleic anhydride market can be segmented into n-butane and benzene. n-Butane is the most preferred raw material that holds the major market share. The factors driving the production of maleic anhydride using n-Butane as source are lower cost, less complex production process, and it's less harmful to the environment.

Currently, maleic anhydride is not produced in Russia and CIS countries and domestic demand is covered by imports.

MA consumption structure

The global demand for MA will grow with a CAGR of 3.5% until 2027, according to forecasts. Unsaturated polyester resins accounts for approximately 53% of MA consumption. A significant share (18%) in demand belongs to the production of 1,4-butanediol.
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Global consumption of maleic anhydride
The global MA market is expected to grow due to increasing unsaturated polyester resins demand by various end-use industries such as automotive, construction, marine.

Asia Pacific and Latin America are the main end-users of MA while Western Europe and the US demonstrate lower than average growth rates.

In general, the situation on the global maleic anhydride market has changed dramatically: the demand exceeds supply.

According to the MAS Albion report, the demand on the Russian market was estimated at 4.5 thous. tons per year in 2015, according to other sources - 5 thous. tons and it annually grows at 4-4.5%. Statistical analyses of imports to Russia confirms the data.

The global maleic anhydride consumption chart is similar to the Russia's one. MA is used in the production of unsaturated polyester resin as well as in the manufacture of pharmaceutical and agricultural products. These industries are the main consumers of maleic anhydride in Russia. MA is a vital component in the production of 1,4-butanediol, fumaric acid, fuel additives, etc.

Unsaturated polyester resins are used in a number of applications like insulation coatings, fiberglass products, sheet moulding compounds and bulk moulding compounds, because they possess good mechanical properties and have excellent thermal stability and weather resistance.

Factors limiting the development of the market are increasing governmental regulation; rising use of green chemicals as an alternative for maleic anhydride; fluctuations raw material prices and unavailability of n-butane deficiency.

Russia statistics of maleic anhydride imports

The analysis was carried based on Russian FEA statistics of maleic anhydride under HS code 2917140000 for 2016-2018. It does not include imports through the Republic of Kazakhstan and the Republic of Belarus.
Total MA imports in 2016 – 2018
*at the border of the Customs Union, excluding import duties, import VAT and customs duties
In 2016, the average bulk delivery cost (volume more than 1 ton, 130 units with a volume of 5,837.56 tons) was 0.96 USD/kg.

In 2017, the average bulk delivery cost (volume more than 1 ton, 121 units with a volume of 5,050.83 tons) was 1.18 USD/kg.

In 2018, the average bulk delivery cost (volume more than 1 ton, 148 units with a volume of 6,233.12 tons) was 1.38 USD/kg (86.64 rubles/kg).
In 2018, the weighted average price for goods that have reached the border of the Customs Union was 1.38 USD/kg. It includes cost for packaging (if it was not included in the price of the goods), loading, delivery, agencies fees, reloading, repacking, insurance, license fees, and design.

This price does not include delivery cost, and others expenses incurred by importer after crossing the border. The import duty, import VAT and customs duties are not included in the price as well.
Структура импорта (в натуральном выражении) по видам изоцианатов за 2017 год
MA import conditions in 2018 according to Incoterms
FOB, CFR, CIF, FCA impose upon the buyer the costs of unloading cargo, customs clearance and its delivery from the border to the destination.

Thus, the average weighted price including duties and VAT is 105.73 rubles/kg. Customs duties have a little effect on prices: it is 105.96 rubles/kg including customs duties. The transportation cost to the destination can be estimated at 10% of the base price 1.38 USD/kg (86.64 rubles/kg).
The market price of 1 kg of maleic anhydride for a consumer in Russia is 1.75 USD/kg.
Among MA supplying countries, the leader is China (31-62%). Taiwan ranks second with 43% of imports in 2016-2018. Other importers are Germany (10-11%), the Netherlands (4-8%), and the Republic of Korea (3-5%).

Among MA manufacturers, in 2016-2018 the major players are Ningbo Zhetie Jiangning Chemical Co., Ltd (China, 17-34%); Sasol-Huntsmann Gmbh & Co.KG (Germany, 14-19%); Nan Ya Plastics Corporation (Taiwan, 13-23%); Excel Chemical Corporation (Taiwan, 5-18%).
Структура импорта (в натуральном выражении) по видам изоцианатов за 2017 год
Shares of the countries-suppliers of maleic anhydride to the Russian Federation in 2018
Структура импорта (в натуральном выражении) по видам изоцианатов за 2017 год
Shares of foreign MA manufactures at Russia market in 2018
Russia does not virtually export maleic anhydride. In 2016-2018, 4 deliveries were declared.

Russia maleic anhydride plants capacity forecast

Russia imposes trade restrictions on import of key chemical products. It means a total refusal from MA import until 2020 and a switching to domestic production (with a maximum planned import ratio of 7%).

Until April 1998, Orgsintez OJSC in Novomoskovsk, Tula region, had produced some limited volumes of maleic anhydride. In 2007, the company jointed the Polyplast group of companies, Russia's largest producer of chemical additives for concrete and construction mortars. FGUP SRC NIOPIK (Scientific Research Institute of Organic Semi-Products and Dyes) participated in the development of maleic anhydride production process for OJSC Orgsintez.

In 2006, OJSC Kazan Synthetic Rubbers plant (Tatarstan) announced its intention to build a new maleic anhydride unit. According to the project, the anhydride was to be produced from butane under the license of Conser (Italy).

In 2015, Tatneftekhiminvest-holding developed a feasibility study for maleic anhydride production at the Chemical Plant n.a. L.Y.Karpov. A subsidiary enterprise of Tatneft PJSC intends to produce annually up to 10 thous. tons of maleic anhydride by 2024.

The Board of Directors of Tatneft Group firmed up a plan to invest 70.6 billion in the development of gas and petrochemical industries, in particular maleic anhydride production, by 2030.

After starting up the production in 2024, it's firstly expected to produce 50 thousand tons of maleic anhydride using associated petroleum gas from the Minnibaevsky gas processing plant (Tatneft group).

In 2015, the Supervisory Board of the special economic zone "Alabuga" approved a project for maleic anhydride production by Kamateh LLC (a joint venture of Russian company Pa-Rus and the German engineering company Chemieanlagenbau Chemnitz GmbH) with an annual production volume of 40 thous. tons. In the future, the project's volume will be increased up to 60 thous. t/y. The total amount of investment in the project is 7.9 bln. rubles. The planned implementation period of the project is 2019. However, there has been no news on the construction and production start of the plant.

In December 2015, the Industrial Development Fund under the Ministry of Industry and Trade approved a loan of 300 mln. rubles for Altai Khimprom to produce maleic anhydride for pharmaceuticals. In 2021, industrial sites will start operating. Previously Altai Khimprom had planned to implement the project by 2017.

The State Corporation Rostec also announced the possibility of creating its own production of maleic anhydride in the Republic of Tatarstan.

Maleic anhydride production project of SIBUR PJSC

One of the most elaborated projects for the production of maleic anhydride is the project of SIBUR PJSC.

In October 2016, SIBUR has signed an agreement with Conser, an Italian engineering company, to acquire a license for maleic anhydride production technology for its Tobolsk facility with an estimated capacity of 45 thous. tons per year. SIBUR will supply its own butane feedstock. The project was planned to be launched in 2020.
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Production in Tobolsk
MA can be produced in two physical states as a liquid (molten) or solid (flake) with briquetting and further packaging in 25 kg HDPE bags per pallet.

The liquid MA was planned to export to Western Europe in ISO tank containers while solid MA was meant to supply to Russia, Turkey, and India in large-tonnage containers and road tankers.

The estimated CAPEX are USD 189 million; the project's IRR is above the industry average one. Target markets are Europe, the Middle East, Asia-Pacific countries. The Russian market is expected to increase up to 10 thous. tons per year, both due to the low base effect and development of consumer sectors with state support including.

In the spring of 2017, in Tobolsk there were public discussions of preliminary assessment of environmental impact (EIA) of maleic anhydride production project. As a result, it was decided to approve the preliminary assessment and to give green light on project implementation.

In the fall of 2017, Russian State Expertise issued a positive opinion on the design documentation for the MA production construction project.

In September 2017, at the Eastern Economic Forum, SIBUR signed an agreement on the MA project with the Agency for Technological Development.

At the end of 2018, it was announced that SIBUR had gone ahead with the project on the territory of SIBUR Tobolsk. The annual capacity of the new enterprise planned to be 45 thous. tons. Conser was chosen as the licensor for the project. NIPIGaz, a leading Russian research center for facility design, procurement, logistics, and construction, was involved in the development of the project's engineering solutions. The facility is scheduled to go online in 2021.

Currently, the project is being implemented in due course; there have already been chosen suppliers of processing equipment. Preparatory work at the building site is carried out on schedule.

Raw materials for MA production. N-butane in the Russian domestic market

Currently, the existing production potential of n-butane and isobutane exceeds the existing domestic petrochemical industry demand for them.
Структура импорта (в натуральном выражении) по видам изоцианатов за 2017 год
Russia production and export of n-butane in 2013-2017
In 2017, n-butane production in Russia remained at the level of 3.1 mln. tons, versus previous two years when there was a slight decline of production. In 2017, 1.4 mln. tons of n-butane were exported from Russia. In the first nine months of 2018, n-butane export amounted to 1.2 mln. tons.

The main producers of n-Butane in Russia are Tuimazinskoye GPP LLC and Shkapovskoye GPP LLC (Rosneft, 28.8 thous. tons), Minnibayevsky GPP (PJSC Tatneft), Permneftepererabotka and Korobkovsky GPP LLC (Lukoil), Uralorgsintez and Tobolsk-Neftekhim (SIBUR Holding), Ryazan Oil Refining Company (Rosneft Oil Company, equipment modernization in 2017).

State policy concerning associated petroleum gas (APG) utilization contributes to the growth of refining capacities. Ultimately, those butane market players will win, who possess a complete process flow from the production of hydrocarbons to the end products – polymers.

Nowadays, it is more profitable to build gas fractionation plants (HFCs) to separate n-butane and iso-butane at fuel and petrochemical refinery plants rather than at GPPs. Today, there are projects of new gas-chemical facilities, but, unfortunately, sometimes there is no specificity regarding the building HFCs for butanes production. In addition, the existing HFCs in Russia are far from always running at full capacity. Moreover, creating a new large production unit involves a vast volume of investments.

License for Maleic Anhydride Production Technology

Licensed MA production technologies are similar and are basing on the oxidation of n-butane. The table shows the main licensors of MA production technologies.

The main licensors of MA production technologies
The cost of licensed technology and production costs
The forthcoming domestic production of maleic anhydride in Russia in the coming years will lead to a significant change in the market and sharp decrease in imports of maleic anhydride.

Given the fact that the demand of the Russian market is significantly lower than the planned capacity of the SIBUR PJSC plant, the issue of exporting excess maleic anhydride or its conversion into high-margin products will become an acute issue.

Our company is aimed at comprehensive assistance to chemical companies in the development, scaling, piloting and industrial implementation of technologies for the use and processing of maleic anhydride.

Having extensive experience in the development and preparation of initial data for the design and homologation of technologies in order to reduce risks, we are ready to cooperate with foreign companies in order to transfer existing technologies for the processing of maleic anhydride, develop new ones and bring them to the Russian market.
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