Amid sustained supply-demand imbalances and market price pressures, compounded by escalating geopolitical tensions, intensified trade barriers like EU anti-dumping tariffs, and the rigid policy guidance of green transition under the “dual carbon” goals, China's adipic acid industry is accelerating its shift toward green and high-end development by 2026. This transformation seeks to uncover structural opportunities within market challenges.
Supply-Demand Imbalance Solidifies
Domestic adipic acid total capacity is projected to climb to 4.455 million tons by 2026, with total output stabilizing around 2.77 million tons. Monthly production will show a gradual upward trend, fluctuating within a range of 200,000 to 250,000 tons. The industry's overall operating rate is expected to hover around 60%, remaining at a historical low.
Downstream sectors including nylon 66, polybutylene adipate terephthalate (PBAT), and thermoplastic polyurethane (TPU) plan to add 635,000 tons of new capacity. However, demand growth in traditional downstream applications like pulp and shoe sole resins remains limited. Assuming all new capacity comes online as scheduled, annual consumption growth is projected at 300,000 tons based on per-product adipic acid consumption rates.
From a production ramp-up perspective, both upstream and downstream capacity expansions are concentrated in the second half of the year, creating phased supply pressure. Specifically, downstream products are projected to add 230,000 tons/year of new capacity in the first half and 405,000 tons/year in the second half; the adipic acid industry is expected to add 450,000 tons/year of new capacity in the second half. Although the annual increase in downstream capacity appears to exceed that of the upstream sector, factors such as the downstream supply-demand dynamics and industry competition may lead to lower-than-expected utilization rates for new downstream facilities. This could result in sluggish production growth, making it difficult to effectively absorb the upstream supply increase. Consequently, the supply surplus in the adipic acid market is expected to persist through 2026.
Weak Price Trend Unlikely to Reverse
In early 2026, driven by strong international crude oil prices, the adipic acid market experienced a temporary upward trend. Escalating geopolitical tensions between the U.S. and Iran/Venezuela, coupled with disruptions in Red Sea shipping, pushed oil prices higher. This drove同步 increases in raw material prices, with Sinopec's listed pure benzene prices rising by a cumulative 300 yuan. Under cost pressure, adipic acid prices climbed to CNY7,600–7,800, but upward momentum quickly faded.
“The outlook for adipic acid prices throughout 2026 is not optimistic. It will be extremely difficult for cost pressures to push prices beyond CNY7,800,” analyzed He Shikuan, Manager of Tianjin Tinghai Technology Co., Ltd. Currently, overall operating rates in core downstream sectors like polyurethane and nylon 66 remain low, with the shoe sole masterbatch and paste industries operating at less than 50% capacity. These sectors exhibit strong resistance to high-priced raw materials. Should adipic acid prices continue to rise, downstream enterprises may opt for shutdowns and maintenance to mitigate cost pressures, further reducing demand and exerting downward pressure on prices. Additionally, with the Spring Festival approaching, downstream enterprises are gradually entering holiday mode. Pre-holiday restocking will primarily involve small-batch, on-demand purchases, making it difficult for manufacturers to maintain their price-supporting stance. After a brief post-holiday demand rebound, prices are highly likely to enter a correction phase.
In 2026, the Federal Reserve's interest rate cut cycle will commence, compounded by a global oil market oversupply. Barring unexpected geopolitical conflicts, the international oil price benchmark will gradually decline, weakening cost support for adipic acid. However, the previous price spread between adipic acid and pure benzene was at a historical low, and 2026 is expected to see some recovery, alleviating the industry's profit pressure.
Multiple factors further constrain the upside potential for prices. First, Zhejiang Petrochemical's 450,000-ton-per-year adipic acid facility is scheduled to commence operations in August. As an integrated refining and petrochemical enterprise, it possesses significant cost competitiveness through its upstream-downstream integration advantages, which will exert downward pressure on the industry's overall pricing. Second, the current settlement mechanism restricts traders from hoarding inventory to drive up prices. The model requiring traders to pay in full upfront and settle at the monthly average price at month-end discourages them from recklessly stockpiling, effectively locking in price elasticity at the transaction level.
Overall, adipic acid prices in 2026 will follow a pattern of higher prices early in the year and lower prices later, with the annual average fluctuating around CNY7,000.
Green Transformation Creates New Opportunities
In 2026, the adipic acid industry will undergo a critical transformation driven by policy guidance, market pressures, and technological innovation. Environmental and carbon reduction policies will continue to accelerate the elimination of outdated production capacity, further consolidating industry concentration. With breakthroughs in synthetic bio-based technologies, China's bio-based adipic acid industrialization has accelerated, entering the demonstration phase at the 10,000-ton scale. Its low-carbon and eco-friendly properties are increasingly penetrating emerging applications such as high-end nylon 66 and 3D printing materials. Domestic bio-based adipic acid production is projected to reach 30,000 to 50,000 tons by 2026, opening a new high-value-added track for the industry.
Continuous optimization of demand structure is generating dual growth drivers. First, the localization of nylon 66 is creating new demand growth points. Second, capacity expansion in the emerging field of biodegradable plastic PBAT is forming another new demand growth point. Zhejiang Petrochemical's current industrial arrangement for adipic acid capacity is precisely based on forward-looking planning for the green demand of PBAT.
By 2026, the green transformation of adipic acid will also become a key factor in breaking through export challenges. On November 13, 2025, the European Commission announced its preliminary anti-dumping ruling on adipic acid originating from China. The ruling imposed provisional anti-dumping duties ranging from 28.6% to 46.8% on Chinese adipic acid producers. Combined with the formal implementation of carbon tariffs, exports to Europe are expected to decline. Companies are accelerating the shift of trade flows toward potential regions such as neighboring Asian markets, the Middle East, and Africa. Exports to the Asian market already account for over 50% of total exports, indicating considerable growth potential.
Meanwhile, green certification has emerged as a new competitive edge for exports. Companies like Chongqing Huafeng, leveraging over 97% nitrogen oxide reduction efficiency and clean production systems, account for more than 40% of China's total adipic acid exports. This green transformation effectively mitigates trade barriers and drives sustained export growth.
Green transformation has become a core competitive advantage for enterprises to reduce costs, enhance efficiency, and expand export opportunities, propelling the industry toward high-quality development.
Green Transformation Unlocks New Opportunities
By 2026, the adipic acid industry will enter a critical transition phase driven by policy guidance, market pressures, and technological innovation. Environmental and carbon reduction policies will continue to accelerate the elimination of outdated production capacity, further consolidating industry concentration. With breakthroughs in synthetic bio-based technologies, China's bio-based adipic acid industrialization has accelerated, entering the demonstration phase at the 10,000-ton scale. Its low-carbon and eco-friendly properties are increasingly penetrating emerging applications like high-end nylon 66 and 3D printing materials. Domestic bio-based adipic acid production is projected to reach 30,000 to 50,000 tons by 2026, opening a new high-value-added track for the industry.
Continuous optimization of demand structure is generating dual growth drivers. First, the localization of nylon 66 is creating new demand growth points. Second, capacity expansion for biodegradable plastic PBAT in emerging fields is forming another demand growth point. Zhejiang Petrochemical's recent expansion into adipic acid capacity is precisely based on forward-looking planning for PBAT's green demand.
By 2026, the green transformation of adipic acid will also become a key factor in breaking through export challenges. On November 13, 2025, the European Commission announced its preliminary anti-dumping ruling on adipic acid originating from China. The ruling imposed provisional anti-dumping duties ranging from 28.6% to 46.8% on Chinese adipic acid producers. Combined with the formal implementation of carbon tariffs, exports to Europe are expected to decline. Companies are accelerating the shift of trade flows toward potential regions such as neighboring Asian markets, the Middle East, and Africa. Exports to the Asian market already account for over 50% of total exports, indicating considerable growth potential.
Meanwhile, green certification has emerged as a new competitive edge for exports. Companies like Chongqing Huafeng, leveraging over 97% nitrogen oxide reduction efficiency and clean production systems, now account for more than 40% of China's total adipic acid exports. This green transformation has effectively mitigated the impact of trade barriers, driving sustained growth in overall exports.
Green transformation has become a core competitive advantage for enterprises to reduce costs, enhance efficiency, and expand export opportunities, propelling the industry toward high-quality development.
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