In 2023, the domestic maleic anhydride market will usher in the release of new product capacity such as maleic anhydride BDO, but it will also face the test of the first big year of production in the context of a new round of production expansion on the supply side, when the supply pressure may increase.

New production capacity of million tons of maleic anhydride is coming into the market and the supply side is under heavy pressure
In 2022, due to the shrinkage of real estate and other terminal industries, domestic downstream demand will decline more than expected, and the supply capacity of maleic anhydride has been relatively surplus under this background, which will significantly suppress the market trend. However, driven by the development expectation of emerging downstream fields such as degradable plastics and new energy vehicles, the proposed capacity of domestic maleic anhydride will still exceed 8 million tons in the next five years, and the industry will therefore usher in a new round of unprecedented capacity expansion.
As the first year of a new round of production expansion, in 2023 alone, China will usher in a new production capacity plan of 1.66 million tons of n-butane process, which can be said to be a veritable year of production. This is undoubtedly “worse” for the maleic anhydride market that has already been oversupplied.

From the perspective of production progress, the supply situation in the second half of the year will be more severe. About 300000 tons of production capacity is planned to be put into production in the first half of 2023, and another 1.36 million tons are planned to be put into production in the second half of 2023; From the perspective of regional

distribution, the supply pressure in East China and its surrounding areas is relatively large, and there is no expectation of new production capacity in South China. 1.65 million tons of production capacity is mainly distributed in Shandong, Liaoning, Henan and other five provinces, of which the production capacity of Liaoning Province accounts for 50.90% and that of Shandong Province accounts for 27.27%.
BDO and other new products were put into production in the first year, and the downstream development became increasingly diversified
In addition to the traditional downstream product unsaturated resin, the downstream field of maleic anhydride will also welcome the release of new product capacity such as maleic anhydride BDO in 2023. In particular, the market entry of integrated projects will significantly increase the self consumption of maleic anhydride products, which will start to shape the pattern of maleic anhydride industry.

However, although there are also many plans to put the downstream products of maleic anhydride into production in 2023, they are still insufficient compared with the efforts to put the supply side into production. The increase in the self consumption of maleic anhydride may only create a tight supply situation in South China and other regions, which cannot effectively alleviate the current pressure of excess supply faced by the maleic anhydride industry as a whole.
Excess pressure suppresses the price trend; the price center may continue to decline throughout the year
Looking forward to 2023, as the recent policy to stabilize the market continues to increase, the real estate market may have the possibility of bottoming out and stabilizing, and the demand for downstream products of maleic anhydride such as unsaturated resin and paint is expected to see bottoming up. In addition, the production capacity of BDO and other products has been put into operation successively, the domestic consumption of maleic anhydride in 2023 will increase significantly compared with that in 2022. However, the increase in demand may not completely offset the increase in the supply of maleic anhydride. It is expected that the pressure of surplus supply of maleic anhydride will continue in 2023, and the price trend will also focus on specific changes in the supply side.