Recently, the Ecological Environment Bureau of Zhumadian City, Henan Province organized a technical evaluation meeting for the environmental impact assessment of a 100 ktpa N-Methyl-2-Pyrrolidone (NMP) project built by Pingmei Shenma Electronic New Material Co., Ltd. Through the analysis of the project’s necessity, process route, and environmental impacts, the expert group unanimously agreed that the environmental impact assessment report of Pingmei Shenma’s 100 ktpa NMP project passed the review, indicating the emergence of a strong new player in the NMP industry.

This project is part of Pingmei Shenma Group’s 450 ktpa NMP project. In the first phase, the group plans to build a 100 ktpa NMP production line and related supporting facilities, and to build a 350 ktpa NMP production line in the second phase. The entire project is expected to be completed by December 2025. The groundbreaking ceremony for this project was held in Zhumadian High-Tech Zone.

China’s NMP industry has been developing rapidly. As of the end of 2022, China’s total synthetic NMP production capacity made up nearly 80% of the world’s total. Currently, NMP in China is mainly used in the power battery industry as a solvent for manufacturing positive electrodes, directly affecting the slurry coating quality of lithium batteries. With the rapid growth of the new energy vehicle market and the localization of power batteries, NMP is entering a golden period of development.

The semiconductor manufacturing is another important application area for NMP. As a widely used organic solvent, NMP can effectively dissolve dirt and residues on the surface of electronic components, achieving a cleaning effect without causing damage to the devices. NMP is often used for panel cleaning and also as a coating agent for electronic component protection and insulation, improving performance and extending lifespan of devices.

Furthermore, as an efficient anesthetic, NMP is frequently used for anesthesia induction and maintenance during surgical procedures. It can also be used as a pesticide to control pests on crops. Therefore, there is also a certain demand for NMP in the pharmaceutical and agricultural industries.

Given the current rapid expansion of NMP capacity by existing and new players in the industry, the expansion rate of production capacity may exceed the growth rate of demand, despite the expected growing demand. This could lead to a period of turbulence and consolidation for the NMP market similar to what was seen with BDO. At that time, the scale effect of companies will be more pronounced, and those with vertical integration strategy will demonstrate their greatest advantages.