Shenghong Group's EVA Capacity Layout Speeds Up: 800 Tons Pilot Project Completed, 1.05 million Tons Capacity Target in Sum

The successful completion of the 800-ton/year high-end EVA new material pilot project of Jiangsu Sirbang Petrochemical Company marks a key step taken by Shenghong Group in the layout of EVA industry. The project was completed in only three months from the EIA announcement in May 2024 to the completion in July, reflecting the rapid implementation ability of Chinese chemical enterprises in the field of new materials.

What is more noteworthy is that Shenghong Group is building an EVA production base with a total production capacity of 1.05 million tons, which will become one of the largest single EVA manufacturers in the world. This capacity scale will have a profound impact on the global EVA market structure, especially in the photovoltaic grade EVA supply chain, Chinese enterprises are expected to further enhance the voice.

comparative Analysis of Capacity Scale

determined capacity composition:

• jiangsu Hongjing New Material: 600000 Tons/Year Photovoltaic EVA (Under Construction)
• two-stage project: 500000 tons/year EVA + high-end copolymer new materials
• pilot project: 800 tons/year (technical verification)

interpretation of the scale of investment:

• hongjing New Materials Project has a total investment of 15.58 billion yuan and covers an area of 1395 mu.
• The 500000-ton EVA project has a total investment of 6.964 billion yuan and will be implemented in stages.
• The investment of high-end copolymer new materials project is 1.607 billion yuan.

In terms of investment density, the investment per unit capacity is about 2.6-28000 yuan/ton, which is a technology-intensive project. This level of investment reflects the high technical barriers and equipment requirements for EVA production.

Technical route analysis

the project adopts the autoclave process patented by ECI in the United States, with the following technical advantages:

• wide operating pressure range (maximum 280MPaG)
• narrow molecular weight distribution, more stable product quality
• low ethylene decomposition frequency and higher safety
• part of the device has been operating safely for more than 50 years, high technology maturity

impact on global EVA supply patterns

increased supply capacity: after the completion of the 1.05 million-ton EVA production capacity of Shenghong Group, it will account for about 8-10% of the total global EVA production capacity, significantly improving China's position in the global EVA supply chain. At present, the global EVA annual production capacity of about 12 million tons, mainly concentrated in the United States, Japan, South Korea and other countries.

photovoltaic industry chain synergies: the project focuses on the layout of photovoltaic-grade EVA, forming industrial synergy with the rapid development of China's photovoltaic industry. In 2024, China's PV module shipments are expected to exceed 200GW, corresponding to EVA demand of about 60-800000 tons, Shenghong's capacity layout just matches this demand growth.

Impact on trade flows

acceleration of import substitution: china's EVA has long been dependent on imports, with annual imports of about 150-2 million tons. The production capacity of companies such as Sheng Hong will significantly reduce their dependence on imports and change the flow of global EVA trade.

Export potential release: considering the global competitive advantage of China's photovoltaic industry, the supporting EVA capacity is also expected to form an export advantage, especially in Southeast Asia, Europe and other photovoltaic terminal markets.

Impact on price movements

short-term price suppression: large-scale production capacity may form a certain pressure on EVA market prices. At present, the price of photovoltaic grade EVA is about 1.8-22000 yuan/ton, and the new supply will ease the tension between supply and demand.

Long-term value reconstruction: with the increase of production capacity concentration and the improvement of technical level, EVA market will shift from quantity competition to quality and cost competition, which is conducive to the better profit space of technology leading enterprises.

business Opportunities

supplier Opportunities:

• demand for upstream raw materials such as catalysts and additives has increased significantly.
• Increased demand for engineering equipment and automation control systems
• increased demand for logistics, transportation and warehousing services

downstream application expansion:

• photovoltaic packaging film market rapid growth
• stable development of traditional applications such as hot melt adhesives and cable materials
• emerging applications such as new energy automotive cables are emerging.

Opportunities for traders:

• domestic EVA quality improvement, import substitution space is broad.
• Increased regional spread arbitrage opportunities
• growth in demand for industrial chain financial services

potential Risks

overcapacity risk: if other companies also put EVA projects into production on a large scale during the same period, they may face the pressure of periodic overcapacity. The pace of overall capacity delivery in the industry needs to be closely monitored.

Technology Dependence Risk: the project uses ECI patented technology in the United States, which is subject to the risk of technology blockade or authorization change. It is recommended to pay attention to the progress of independent technology research and development.

Market volatility risk: policy changes in the photovoltaic industry may affect EVA demand, and attention needs to be paid to the adjustment of new energy policies at home and abroad.

Raw material supply risk: price fluctuations of major raw materials such as ethylene and vinyl acetate will directly affect production costs, and effective hedging mechanisms need to be established.

short-Term Outlook (1-2 years)

with the success of Shenghong's pilot project and the advancement of industrialization projects, China's EVA industry will usher in a period of rapid development. It is estimated that from 2025 to 2026, China's EVA self-sufficiency rate will increase from the current 30% to more than 50%.

Medium-Term Outlook (3-5 years)

by 2027-2029, when the production capacity of large chemical enterprises such as Shenghong is fully put into operation, China is expected to achieve the basic self-sufficiency of EVA and form a global competitive advantage in the field of photovoltaic-grade EVA. Industry concentration will increase significantly, and the market voice of the head enterprises will be enhanced.

Long-term strategic significance

the successful implementation of Shenghong EVA project not only helps to ensure the safety of China's new energy industry chain, but also provides an important sample for Chinese chemical enterprises to make breakthroughs in the field of high-end new materials. This "pilot-industrialization-scale" development model is worth learning from the industry.