The demand can reach 1 million tons!

Recently, Anhui Tanxin Technology Co.
, Ltd.
has an annual output of 200,000 tons of EVA project (bid section 1, including ethanol dehydration to ethylene, vinyl acetate and the public and auxiliary facilities of the whole plant), and an annual output of 180,000 tons of ethylene carbonate project (including ethylene oxide.
, ethylene carbonate, CO2 purification and supporting public and auxiliary facilities) preliminary design contract signing ceremony was held in Beijing Petrochemical Engineering Company
.

High market prices boost corporate performance

The continued high EVA market also boosted corporate performance
.

Among the listed companies, Dongfang Shenghong has an annual production capacity of 300,000 tons of EVA, of which the photovoltaic-grade production capacity exceeds 200,000 tons, accounting for about 28% of the global photovoltaic-grade EVA production
.
In the first quarter of this year, Dongfang Shenghong achieved revenue of 13.
773 billion yuan, an increase of 10.
56% month-on-month, and a net profit attributable to the parent of 688 million yuan, a month-on-month increase of 9.
66%;

Rongsheng Petrochemical has an annual production capacity of 300,000 tons of EVA, and achieved revenue of 68.
601 billion yuan in the first quarter, an increase of 43.
92% from the previous quarter; net profit attributable to the parent was 3.
116 billion yuan, an increase of 15.
33% from the previous quarter
.

Lianhong Xinke released the 2022 semi-annual performance report on the evening of July 22.
The company achieved operating income of 3.
938 billion yuan in the first half of the year, a year-on-year increase of 2.
93%.
The net profit attributable to shareholders of the listed company was about 457 million yuan, and the basic earnings per share was 0.
34 yuan.

.
Benefiting from the strong demand for downstream photovoltaics, Lianhong Xinke's EVA device has achieved the expected results after the transformation.
In the second quarter, the company's profit reached a record high, with a net profit of 349 million yuan
.

Supply and demand remain in tight balance

EVA resin is a general-purpose polymer.
With the adjustment of the domestic industrial structure, the EVA industry has shown differentiated development
.
Foamed shoe materials and films belong to the traditional application fields of EVA resin, the demand is close to saturation, and the proportion of consumption has shrunk
.
At the same time, with the development of China's photovoltaic industry, pre-coating technology and halogen-free flame retardant cables, solar cells, coating, wire and cable have become important application areas of EVA resin, and the demand has grown steadily
.

At present, only a few domestic companies such as Lianhong Xinke, Dongfang Shenghong, and Rongsheng Petrochemical can produce photovoltaic grade EVA resin
.

Looking forward to the future, the supply-side new capacity release cycle is long, the proportion of high-end photovoltaic materials is low, and the import dependence is still high; the demand side is driven by multiple factors such as the increase in photovoltaic terminal installed capacity, the expansion of industrial chain capacity, and the increase in film weight
.
High-quality EVA photovoltaic materials continue to be scarce, the tight balance between supply and demand remains unchanged, and the industry boom is expected to continue
.

As the price of traditional energy continues to rise, the global photovoltaic industry will accelerate its development
.
The EVA resin has the characteristics of slow supply and heavy volume
.
Although a number of EVA resin production capacities have been put into operation at the end of 2021, the contradiction between supply and demand is still there.
From 2022 to 2023, the growth rate of production capacity will generally slow down and the growth rate of demand will continue to increase.
However, due to the increasing demand for EVA in China, especially the demand for photovoltaic materials, and more Dependence on imports, so there is a lot of room for import substitution, the domestic EVA operating rate will steadily increase, and the supply will remain in a tight balance
.
It is expected that EVA will continue to boom in 2022, and the price spread will remain high
.

The ICIS supply and demand database shows that 500,000 tons of new production capacity will be put into operation from September to December 2022, see Table 1 for details
.
The supply of EVA resin is still tight in the next two years
.
In addition, the supply and demand pattern of raw material vinyl acetate has been improved, and the price has continued to rise, which has a strong support for the cost of EVA resin
.
EVA is expected to remain high in the next two years
.

Table 1 China's new EVA production capacity in 2022

Image source: ICIS

The supply of photovoltaic grade EVA is tight

In 2022, the production capacity of domestic EVA particles will increase rapidly, and the production capacity is expected to reach 511,000 tons by the end of the year.
The main photovoltaic material manufacturers are Sierbang, Lianhong and Ningbo Formosa Plastics
.
In 2023, the demand for photovoltaic EVA resin is expected to exceed 1 million tons!

01 There are differences in the pace of production at home and abroad, and there is a lot of room for domestic substitution

The expansion of domestic large-scale refining and chemical production is accelerating.
According to Sinochem Consulting data, 4 sets of EVA plants will be put into operation in China in 2021, with an additional capacity of 800,000 tons/year, with a total capacity of 1.
772 million tons/year, and a capacity expansion rate of 82%.

.
The supply of EVA in Taiwan, China and overseas is stable, and the existing capacity planning is relatively small
.
Currently overseas, only the 300,000-ton/year capacity of Lotte in South Korea is expected to be put into production in 2022
.
The domestic EVA import dependence has been above 60% in recent years, and the import dependence will still reach 53% in 2021 under the condition of domestic expansion
.
In the future, import dependence is expected to continue to decline, and domestic EVA manufacturers are expected to further open up development space with the advantages of cost and supply guarantee
.

02 The newly added photovoltaic grade EVA achieves a long stable production cycle, and the tight supply is expected to support the high prosperity

In 2022, the increase in photovoltaic materials will mainly come from Zhejiang Petrochemical and LG devices, and considering the long production cycle of photovoltaic materials, it is expected to take 4 years from construction to downstream manufacturers' trial, and the supply of photovoltaic EVA is expected to remain tight
.

According to Jinlianchuang, in July, the demand for photovoltaic materials may have limited support for the EVA market trend, and the market may continue to decline
.
The price of silicon material, the upstream raw material of photovoltaic modules, has skyrocketed beyond expectations.
The profits of photovoltaic module factories have been compressed sharply, and the profits of small-scale factories have been meager or even negative.
The enthusiasm for purchasing is not high, and inventory is mainly digested
.
As another upstream raw material of photovoltaic modules, EVA photovoltaic material has been reduced in price, but downstream factories are cautious in purchasing, and there is a strong wait-and-see atmosphere
.

By the end of 2024, EVA photovoltaic materials can reach a self-sufficiency rate of 90%
.
It is difficult for EVA photovoltaic materials to fall significantly before this, and it is estimated that it will fall significantly after 2024
.

Industry insiders said that at present, the demand for photovoltaics is strong.
In the short term, there is a lack of new domestic production capacity support.
If the import continues to be tight, the follow-up EVA price will hardly fall
.
At present, domestic enterprises are actively completing technology digestion and process precipitation.
It is expected that during the "14th Five-Year Plan" period, there will still be a large gap in high-end EVA products
.

According to the optimistic view of the market, the EVA market may stop falling and rebound in August.
There are still 5 domestic polysilicon companies with maintenance plans in August, but the increase in production capacity released during the same period is greater than the impact of maintenance, and domestic production has increased month-on-month.
It is expected that The shortage of domestic polysilicon supply will be alleviated in August, because the demand for photovoltaic modules is relatively good, driven by the rapid growth of new energy in Europe and the development of large-scale power station projects in China, which will drive the EVA market price to stop falling and rebound;

A pessimistic view of the market, "In the fourth quarter, the new production capacity of silicon materials will be released, and there will be no capacity bottlenecks for silicon materials next year.
It is unknown when the price of silicon materials will fall back in the early stage.
If the cost pressure of modules continues to increase, procurement will slow down.
EVA is a photovoltaic industry.
Important upstream raw materials in the chain will inevitably be affected, EVA petrochemical companies may switch to other brands to ease the accumulation of photovoltaic inventory pressure, and the upward resistance of the EVA market is relatively large
.
The specific EVA market trend needs to pay close attention to photovoltaic demand, other types of EVA terminal demand support and macroeconomic policy and other factors
.