Integer Research's Beijing office updated its Chinese Adblue market estimate in December 2016 and found that AdBlue consumption totalled just over 424,000 tonnes in 2015, up 146% compared with 2014. Integer estimates that Chinese AdBlue consumption reached 624,000 tonnes in 2016, about up 47.3% compared with 2015.
China started to develop AdBlue product in 2011 and there were only a couple of producers at that time, such as Kelas, Sinopec, Sichuan Meifeng and etc. Kelas produced more than 132,000 tonnes of AdBlue during 2011-2015 and became the biggest supplier in China. According to Integer's research, there are now more than 500 AdBlue suppliers in China. A majority of producers operate on a very small scale, with average monthly sales less than 20 tonnes. We expect that many of these small-scale producers in the longer term because of fierce market competition, and their market share will be replaced by the producers who have distribution networks, such as Sinopec or PetroChina, and scale economies, such as Kelas.
China is the second largest automobile market in the world. According to the China Association of Automobile Manufacturers, China sold 654,000 heavy duty trucks during the first eleven months of 2016, increasing by 31% year-on-year. Mr. Jian Qin, the managing director of Kelas, told Integer that Chinese AdBlue market will be more active if the government commit to their goal of improving air quality and reduction emissions in the coming years. With China V coming into force from 2017, it's likely to see central government to take further steps for legislation enforcement.