China’s adipic acid industry enters 2026 at a pivotal crossroads, defined by a persistent supply-demand surplus, stubbornly weak price dynamics, and mounting international trade barriers—most notably EU anti-dumping duties. Yet amid these headwinds, the industry is accelerating a strategic shift toward green and high-end transformation: advancing bio-based production technologies, tapping into high-growth emerging downstream sectors, and reconfiguring export strategies to mitigate trade risks. This dual landscape of market challenges and structural opportunities is reshaping the trajectory of China’s adipic acid sector, the world’s largest producer and exporter of the key chemical intermediate.
Core Market Reality: Persistent Oversupply Becomes an Inevitable Trend
2026 will see China’s adipic acid industry grapple with a deepening supply-demand imbalance, with capacity growth outpacing demand absorption and operating rates remaining at historically low levels—creating a structural surplus that will define market fundamentals.
• Capacity and output projections: China’s total adipic acid production capacity is set to rise to 4.455 million tons in 2026, with annual output stabilizing at around 2.77 million tons (monthly output fluctuating between 200,000 and 250,000 tons). The industry’s overall operating rate is forecast to linger at approximately 60%, a multi-year low that underscores the severity of oversupply.
• Asymmetric upstream and downstream capacity expansion: While downstream sectors plan to add 635,000 tons of new capacity (focused on nylon 66, PBAT, and TPU), traditional downstream demand (coatings, shoe sole solutions) remains stagnant. Even if all new downstream capacity comes online as scheduled, adipic acid consumption is only expected to rise by 300,000 tons annually. Compounding this, 450,000 tons of new adipic acid capacity is set to launch in the second half of 2026—coinciding with delayed downstream capacity commissioning and potential low operating rates for new downstream plants. This mismatch means new downstream demand will fail to effectively absorb upstream supply increments.
• Phased supply pressure: Upstream and downstream capacity additions are heavily concentrated in H2 2026, with adipic acid’s new capacity (450,000 tons/year) outpacing downstream’s H2 additions (405,000 tons/year). This timing imbalance will amplify short-term supply gluts and keep the industry mired in oversupply for the full year.
Price Trend: Weak Trajectory Unlikely to Reverse, Inverted "U" Shape Forecast
After a brief early-year uptick driven by crude oil price gains, adipic acid prices in China have quickly lost momentum, with a weak price trend set to persist throughout 2026—constrained by downstream cost resistance, new capacity launches, and eroding cost support.
• Short-lived early-year rally: At the start of 2026, escalating U.S.-Iran and Venezuela geopolitical tensions, plus Red Sea shipping risks, pushed crude oil and pure benzene prices higher (Sinopec’s pure benzene listed price rose by a cumulative 300 RMB/ton), lifting adipic acid prices to 7,600–7,800 RMB/ton. This upward movement was short-lived, however, as weak downstream demand quickly curbed further gains.
• Strong downstream cost resistance: Key downstream sectors (polyurethane, nylon 66) operate at low rates, with traditional sectors like shoe sole solutions and coatings running below 50% capacity—creating fierce resistance to high-priced adipic acid. Any further price hikes would trigger downstream production shutdowns or maintenance, further suppressing demand and pushing prices lower. Pre-Spring Festival restocking is also limited to small, on-demand purchases, eliminating a key catalyst for price gains.
• Eroding cost support and structural constraints: The Federal Reserve’s 2026 interest rate cut cycle and a globally oversupplied oil market are set to drive gradual crude oil price declines (absent unexpected geopolitical conflicts), weakening the cost floor for adipic acid. Additionally, Zhejiang Petrochemical’s 450,000-ton/year adipic acid plant—set to start in August 2026—will leverage integrated refining and petrochemical advantages to offer significant cost competitiveness, exerting broad downward pricing pressure on the industry. A rigid settlement mechanism (full prepayment + monthly average pricing) also discourages trader hoarding, locking in low price elasticity.
• 2026 price forecast: Industry analysts project an inverted "U" shape price trend for 2026 (start high, end low), with an annual average price hovering around 7,000 RMB/ton. A modest recovery in the adipic acid-pure benzene price gap (from historic lows) is expected to ease some industry profitability pressures, but not enough to drive a meaningful price rebound.
Strategic Lifeline: Green and High-End Transformation Unlocks New Opportunities
Faced with oversupply, weak prices, and trade barriers, China’s adipic acid industry is accelerating a green transformation—driven by national "dual carbon" policies, technological breakthroughs, and the need to mitigate export risks. This shift is not only a compliance requirement but a core strategy to build new competitiveness and unlock high-value-added growth.
1. Bio-based Adipic Acid: Industrialization Enters a Critical Phase
Breakthroughs in synthetic bio-based technologies have propelled China’s bio-based adipic acid development into the 10,000-ton demonstration phase, with production expected to reach 30,000–50,000 tons in 2026. Its low-carbon, eco-friendly characteristics are gaining rapid penetration in high-end emerging sectors (high-grade nylon 66, 3D printing materials), opening a high-value-added track that diverges from the commodity-grade adipic acid market’s oversupply woes. This shift is also aligned with global low-carbon manufacturing trends, positioning Chinese producers for long-term market relevance.
2. Optimized Demand Structure: Dual Growth Drivers from Emerging Downstream Sectors
The industry is reorienting toward high-growth downstream segments to offset stagnant traditional demand, creating two key demand growth drivers:
• Localization of nylon 66: The domestic substitution of nylon 66 (a high-performance engineering plastic) is creating a sustained new demand pool for adipic acid, a key raw material for its production.
• Biodegradable plastic PBAT capacity expansion: As China ramps up production of PBAT (a core biodegradable plastic aligned with plastic ban policies), demand for adipic acid as a key monomer is surging—with Zhejiang Petrochemical’s adipic acid capacity investment a direct response to this green demand trend.
3. Export Strategy Adjustment: Mitigating EU Trade Barriers with Green Competitiveness
2026 marks a critical year for China’s adipic acid exports, with the EU’s preliminary anti-dumping duties (28.6%–46.8%, imposed November 13, 2025) and the formal implementation of carbon tariffs set to shrink European market share. The industry is responding with two targeted strategies to preserve and grow export volumes:
• Trade flow reconfiguration: Companies are accelerating the shift of export focus from Europe to high-potential regions—neighboring Asian countries, the Middle East, and Africa. Asia already accounts for over 50% of China’s adipic acid exports, offering significant room for further growth (a market where Chinese suppliers like Achilles Chem have established a strong global footprint across Thailand, Singapore, South Korea, the UAE, and Germany).
• Green certification as a competitive edge: Green production capabilities have become a key differentiator for export success. Enterprises like Chongqing Huafeng—with over 97% nitrogen oxide emission reduction efficiency and advanced clean production systems—account for more than 40% of China’s total adipic acid exports. Green transformation has not only mitigated the impact of EU trade barriers but also driven overall export growth by meeting the low-carbon requirements of emerging markets.
Industry Outlook: Green Transformation as the Core of High-Quality Development
2026 will be a year of structural adjustment for China’s adipic acid industry: the persistent supply-demand surplus and weak price environment will continue to pressure low-cost, low-efficiency producers, while policy-driven environmental regulations will further phase out outdated capacity and boost industry concentration. For surviving and thriving enterprises, green transformation is no longer an option but a mandatory strategic priority.
Bio-based adipic acid industrialization, deepening integration with high-growth downstream green sectors (nylon 66, PBAT), and the development of green export competitiveness will be the three core pillars of the industry’s high-quality development. While near-term market pressures (oversupply, trade barriers) remain significant, the industry’s shift away from commodity-grade, volume-driven growth toward high-value-added, low-carbon production is laying the foundation for long-term sustainability.
For global buyers and industry stakeholders, the 2026 landscape means greater access to green, high-quality adipic acid from Chinese producers, alongside continued price competitiveness in the commodity segment. As China’s adipic acid industry navigates its transformation, it will not only reshape its own domestic market but also exert a growing influence on global adipic acid supply chains and low-carbon chemical manufacturing trends.
