Industry sources acknowledged that geopolitical considerations give China room to manipulate the direction of nitrocellulose flows but denied the accusations, saying Beijing cannot strangle the supply chain if Europe is willing to increase production on its own.
As you know, deliveries of this cotton from China stopped, as if by coincidence, a few months ago.
“The manufacturing technology is very simple, so there’s no point in restricting exports. It can never really hinder rival countries’ military production,” said Lu Wei, an adviser to the China Public Security Guard Training Center, a Beijing-based counterterrorism training institute.
Discovered in Europe in the 19th century, nitrocellulose is made primarily by exposing cotton linters (the short, fluffy fibers of cellulose that remain in the seed after the main cotton is removed) to nitric acid or other strong nitrating agents.
Nitrocellulose, the less nitrated forms, is widely used in plastic films, inks, and wood coatings.
Once little known, it was thrust into the spotlight when French President Emmanuel Macron said after a meeting with Ukrainian allies in Paris in February that “we all recognize that we have to confront shortages of some components, such as gunpowder.”
More specifically, European Union (EU) Commissioner for the Internal Market Thierry Breton said the EU was facing difficulties finding raw materials for explosives to supply Ukraine.
“To make flour you need certain types of cotton, mostly from China,” he said in March.
“As you know, cotton deliveries from China coincidentally stopped a few months ago.”
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During the Shangri-La Dialogue, President Zelensky urges China to help end the Ukraine war
During the Shangri-La Dialogue, President Zelensky urges China to help end the Ukraine war
But some of Europe’s biggest arms manufacturers have said supplies of raw materials from China remain normal.
But they warned that China could restrict exports of related goods if relations deteriorated.
Armin Papelger, CEO of Rheinmetall, a major Germany-based maker of ammunition, told the Financial Times in April that Europe relies on China for “more than 70 percent” of its cotton linters.
Mikael Johansson, CEO of fellow European defense company Saab, also told Politico in April that it would be “harmful” if China cut off its supplies of nitrocellulose and that Western defense companies should diversify their sources.
Saab and British aerospace and defense manufacturer BAE Systems did not respond to requests for comment, while Rheinmetall has not yet commented. Norwegian defense company Namo also declined to comment.
When complaints from European politicians reached Chinese social media, they were seen as a “boomerang” thrown by Europe, which then hit back at itself to hurt itself.
Some bloggers argued that the EU’s proposed ban on imports from China’s Xinjiang Uighur Autonomous Region, due to allegations of forced labor of the Uighur minority, was the reason China could not import enough nitrocellulose, which is made from cotton grown in the vast western region.
It’s inevitable that nitrocellulose produced in China will end up originating in Xinjiang, the region that produces 90 percent of the country’s cotton.
But industry sources said the allegations of forced labor in Xinjiang, which Beijing strongly denies, have no bearing so far on the global supply of nitrocellulose.
The EU’s proposed forced labor ban, which has yet to be finalized, would cover all forced labor without specifically naming Xinjiang in order to comply with World Trade Organization rules, but it is believed to have been drafted with the region in mind.
Bradley Martin, a senior policy fellow at the RAND Corporation, said there was not enough basis to conclude that Europe was too dependent on China for nitrocellulose, and no evidence that there was a major global shortage.
“This is a relatively easy product to produce. There can certainly be spot shortages. It doesn’t appear there is any kind of widespread, systematic shortage,” Martin said.
“Without the supply, that won’t happen. [of nitrocellulose from China]Europe is going to be particularly bad… Otherwise there will be ways to get to the products. The raw materials are cotton and so on, we’re not dealing with critical minerals and so on.”
A Chinese explosives-detection expert said nitrocellulose could be produced “fairly easily” in the chemical industry, but because it is flammable and explosive, only a few companies are qualified to produce it due to safety concerns.
He added that the distribution of the substance in the market is also under government control.
“When we need it, we just synthesize it ourselves in a lab using sulfuric acid, nitric acid, cotton and lots of cold water and ice,” said the expert, who asked not to be named due to the sensitivity of the matter.
So while Beijing may withhold imports of products for geopolitical reasons, increasing production is something the EU could do but would want to avoid, and the real bottleneck for the EU may be the EU itself.
if [the Ukraine] If the war were to end within a few weeks, demand for nitrocellulose would fall.
“It is up to European countries to decide whether to bring nitrocellulose production back home, but the time is not yet right,” counterterrorism adviser Lu added.
European arms manufacturers are stockpiling nitrocellulose and cotton linters, but this is to replenish stockpiles rather than because they are running out of supplies, he added.
“if [the Ukraine] “If the war were to end within the next few weeks, demand for nitrocellulose would certainly decrease,” Martin said.
Ni Lexiong, a Shanghai-based military analyst, said European companies have been reluctant to produce nitrocellulose because it is a contaminant and dangerous, as revealed by the Hubei explosion, and have outsourced production to China for the past few decades.
“When the factories were set up and problems arose, people would protest, so they would have to outsource production to China,” Ni said. “Then when war broke out, people started to feel uneasy.”
According to the International Trade Center, China is not the world’s largest exporter of nitrocellulose.
In 2023, Thailand will be the largest exporter with US$108.6 million, followed by Germany with US$86.6 million and mainland China with US$81.9 million.
When it comes to cotton linters, Turkey, Brazil and the United States are the top three exporters in the world. According to the data, in 2022, shipments from these three countries accounted for half of the world’s total exports.
China dominates the export market for cotton linter pulp, the main extract of cotton linters, accounting for 49.3% in 2022, followed by the United States with 24.9% and Spain with 10.1%.
“Cotton is produced in a lot of places, but the production of cotton into nitrocellulose isn’t, and it’s a very important part of the supply chain,” RAND’s Martin said.
Asked by The Post on its public investor platform whether the company had cut supplies to Europe, China North Chemical, a subsidiary of state-owned China North Industries Group Corp, said its “production and operations are running normally” and that it could not disclose relevant information as the question “involves the company’s trade secrets.”
According to the company’s disclosure, its nitrocellulose products will have an international market share of 15% in 2023.
Our production capacity is small, so if war suddenly breaks out, it’s only natural that we’ll have a supply shortage.
Meanwhile, the company’s main export markets are the United States, Europe, Vietnam and Africa, with 80% of its nitrocellulose being used in the production of coatings and inks.
According to Chinese customs data, Vietnam will be the largest importer of nitrocellulose from China in 2023, followed by France and the United States, although the United States bans all imports containing materials from Xinjiang due to allegations of forced labor.
Even in China, overall nitrocellulose production capacity is limited, according to Zhang Biao, general manager of Zhongwang Textile, a cotton factory in Yuli county, Xinjiang Uygur Autonomous Region.
He added that of Xinjiang’s annual cotton production of 5 million tonnes, it can only produce about 240,000 tonnes of cotton linters, much of which is used for purposes other than nitrocellulose.
“The overall production capacity is small, so if war suddenly breaks out, it is natural that there will be a supply shortage,” Zhang said.
China has also been cutting back on its nitrocellulose production capacity in recent years.
Last year, North Chemical Industries closed its Xi’an plant, which had a production capacity of 25,000 tonnes, so its total production capacity in 2023 will be 39,882 tonnes, down 32% from 2021.
Meanwhile, Chinese exports of the compound to Russia have surged from zero since the 2022 invasion of Ukraine, according to Chinese customs data, though the data does not indicate whether the exports are for military or civilian use.
Martin said Russian imports are “almost certainly being used to make munitions” and that Russia is importing more nitrocellulose from China because it can’t get it anywhere else.
Nitrocellulose exports to Russia over the past two years were also produced by companies in the United States, Germany and Taiwan, The Wall Street Journal reported in March.
China certainly supplies Europe with a variety of goods, but nitrocellulose is probably not one of our major weaknesses.
Still, as the EU and US seek to “de-risk” their entire supply chains by moving away from China, bringing nitrocellulose production back home is on the agenda, and Poland is investing in restarting nitrocellulose production to meet increased demand for artillery.
“China certainly supplies a variety of goods to Europe, but nitrocellulose is probably not one of our major weaknesses,” Martin said. “It’s not like processing critical minerals. It’s something we could address fairly easily if we needed to.”
“But nevertheless, it’s good practice to have excess capacity in the defense industrial base. Having access to what you need when you need it is really important.”
Additional reporting by Amber Wang, Chan Tong and Finbar Birmingham
