Since December, major domestic producers of ADC foaming agents have raised their export prices to over $2,000 per ton. This marks the second price increase this year, following a similar move in July. According to industry sources, the primary reason for the price hike is to offset rising costs associated with environmental protection measures. ADC (Azodicarbonamide) is an organic chemical widely used in the production of foam products from materials like polyethylene, PVC, polystyrene, and polypropylene. It is non-toxic, non-discoloring, and stable, with no viable alternatives currently available in the market. China has been the world's largest producer of ADC since 2004, with annual production growing at around 15% per year. This year’s output is expected to reach 135,000 tons, with exports reaching nearly 50,000 tons in the first eight months. However, despite growing demand, ADC manufacturers have struggled with low profit margins. The cost of key raw materials such as urea, sulfuric acid, caustic soda, and chlorine has risen steadily, while ADC prices have remained low. This has left many companies operating at a loss or with minimal profits. A recent issue has further complicated the situation: the use of hydrazine hydrate synthesized via the urea method in ADC production. This process is inefficient, energy-intensive, and pollutes heavily. In June, CCTV’s "Focus Interview" exposed pollution issues at several ADC factories, sparking widespread concern. In response, the State Environmental Protection Administration and the Ministry of Science and Technology conducted investigations into the environmental impact of ADC production. Many companies now face a difficult choice: either invest in costly environmental upgrades or risk regulatory penalties. “We don’t want to pollute, but we don’t have the money,” said one company CEO. According to Kong Cuiqin, director of the ADC Foaming Agent Committee, pollution control costs add about 2,000 yuan per ton, making up over 13% of total production costs. To address these challenges, companies have increased export prices by $200 per ton in late July, followed by another raise in December. “The previous low prices made it impossible to invest in environmental protection,” explained Wei Yuanzhou, deputy general manager of Fujian Longhua Chemical. Some firms have already begun investing in pollution control. For example, Longhua Chemical spent over 10 million yuan on end-of-pipe treatment, while Jiangsu Thorpe invested more than 40 million yuan in wastewater treatment systems. They have implemented advanced water-saving washing devices and precision filtration to reduce ammonia levels in wastewater. Despite these efforts, most companies still struggle with effective pollution control. After the price increases, many have launched new initiatives, including research on ammonia removal and emission reduction. Jiangsu Thorpe is also developing new technologies like hydrazine extraction and distillation purification to minimize pollution at the source. “After raising prices again, we finally have the funds to continue investing in environmental protection,” said one executive. “Where else can we get this money from?”

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