Recently, a mobilization meeting for the start-up of Xinjiang Tianye’s 1 million tons/year syngas-to-ethylene glycol phase I 600,000-ton ethylene glycol project was held to carefully deploy various work for the start-up of the project and encourage the builders to make persistent efforts and go all out to ensure The project’s chemical input was a one-time success. It is understood that Xinjiang Tianye Huihe New Materials Co., Ltd. produces 1 million tons/year of syngas to produce ethylene glycol. The core process adopts the patented technology of high-chemical syngas to produce ethylene glycol. After the completion of the first phase of the 600,000-ton diol project in the park, subsequent coal-to-ethanol and downstream new material projects, polyester and upstream and downstream supporting projects will be promoted and coupled with development.
Hidden worries about ethylene glycol grabbing the international market
Since 2018, ethylene glycol has entered a rapid expansion cycle, and the world’s ethylene glycol supply and demand situation has shifted from a balance of supply and demand to a trend of surplus supply. . Affected by the expansion of production capacity of various ethylene glycol production processes in recent years, especially the rapid development of coal-to-ethylene glycol in China in recent years, downstream demand is difficult to see improvement. It is understood that at present, both ethylene glycol production companies and syngas production ethylene glycol companies are facing the pressure of overcapacity and oversupply in the entire industry. Despite this, various manufacturing companies still maintain high-load operations, exchanging market profits for profits, in response to the surge in domestic production capacity and competition from foreign imported supplies.
In this regard, relevant industry insiders said that ethylene glycol production companies mainly consider comprehensive profits, rather than the profits of a single ethylene glycol production line. If ethylene glycol production companies cease production, it will be difficult to sell raw ethylene stocks because ethylene has poor liquidity. There are only more than 20 ethylene ships in Asia, and it is not cost-effective to sell ethylene alone. In addition, 80% of the profits in the ethylene chain come from polyethylene and 20% of the profits come from ethylene glycol. Unless the entire downstream ethylene chain is unprofitable, it is possible to consider suspending production. Although the current coal production method is not profitable, in order to maintain cash flow and customer relationships, companies can optimize production but are unlikely to suspend production. Industry insiders analyze that the current oversupply of ethylene glycol has just begun, and the real challenge is yet to come. In the next five years, global ethylene glycol production capacity will see substantial growth. Abroad, many large-scale projects have been launched in North America, the Middle East and South Asia. These devices mostly use cheap ethane as raw material and have strong international competitiveness. Domestically, there are still multiple units planned to be put on the market in 2020, with a total production capacity of up to 8.3 million tons. Among these projects, the production capacity of the Youtou ethylene glycol unit accounts for nearly 40%, including Zhejiang Petrochemical Phase II, Hengli Petrochemical Phase II, Sinochem Quanzhou, Zhongke Refining and Gulei Petrochemical, etc. Others are coal-to-ethylene glycol projects that have been delayed repeatedly, such as Xinjiang Tianye, Hubei Sanning, Shanxi Meijin, Shaanxi Weihua, etc. The annual production capacity of the projects planned to be put into production from 2020 to 2025 will reach 15 million tons.
Relevant statistics show that at the end of 2019, my country’s total ethylene glycol production capacity was 11.59 million tons/year. By 2022, if the various ethylene glycol route devices currently planned in the country can be put into production according to the actual plan, the ethylene glycol production capacity will reach 30.58 million tons by then, while China’s apparent demand for ethylene glycol in 2018 was 16.68 million tons. It is expected to reach 20.24 million tons in 2022.
With the development of shale oil, the number of overseas natural gas production methods will increase, and this production method has obvious cost advantages. The future competitive landscape of the ethylene glycol market will be coal chemical industry , large-scale refining, and overseas gas head production methods, the ethylene glycol industry may face a reshuffle. However, with the global overcapacity of ethylene glycol, when purchasing raw materials, the price range negotiated with foreign suppliers is relatively large. At present, the bargaining power of upstream petrochemical companies is weakening, while that of downstream companies is gradually increasing.
Total
Taken together, affected by the COVID-19 epidemic, the global economic situation is not good, downstream demand is sluggish, coupled with high inventory and the return of equipment such as Zhongsha Tianjin and Yangzi BASF, there are also Under the pressure of the restart of coal-to-ethylene glycol companies such as Qianxi Coal Chemical, Yangmei Shouyang, and Yongjin Puyang, the domestic ethylene glycol market may be under pressure again. </p
