From June 18th to 19th, at the “2020 China Chemical Industry (Futures) Conference” jointly organized by Dalian Commodity Exchange and China Petroleum and Chemical Industry Federation, General Manager of the Strategy Department of Sinochem International’s Industrial Resources Division In his speech, Zhao Junyi talked about the current situation of coal-to-ethylene glycol production in China.
Zhao Jun said: In China, Mainly because China’s coal-to-ethylene glycol and integrated refining and chemical enterprises’ ethylene glycol growth will be relatively large. China accounts for more than 50% and nearly 60% of global demand. China can be said to be the global demand center for ethylene glycol and will also become the center of pricing in the future.
As far as the ethylene glycol industry is concerned, the traditional industry is from ethylene oxide to ethylene glycol after hydration, and then it is the main raw material for polyester fiber, and there is also coal-based ethylene glycol. Alcohol, from CTM to ethylene glycol, is an emerging route in China in the next few years, and it will face greater challenges in the future.
First look at the ethylene market, then look at the ethylene oxide market, and then look at the ethylene glycol market. Basically, we can look at the development trend of the entire industry along this industrial chain. Ethylene is a very important chemical raw material. 2/3 of organic chemicals are derived from ethylene, which is the most basic chemical product. Basically, there will be about 170 million tons of ethylene in 2020, 44% of which will be supplied by ethane, and 90% by propane as raw material. This trend position will remain unchanged after 2025. In addition, in the yellow area, the petroleum method is used to produce ethylene using naphtha. This is the most important route. This trend will be very obvious in China in the next few years. In the ten years from 2015 to 2025, the entire large-scale refining and chemical industry has developed very rapidly in China.
China’s large-scale refining and chemical industry is developing very fast. At present, the production capacity is nearly 30 million tons, and there will be an increase of nearly 39 million tons in the next five years or so. The increase is mainly through the production of ethylene from naphtha, and we can see that the amount is basically particularly large in coastal areas. In the northwest region, ethylene and propylene are mainly produced through coal-to-olefin production. Because ethylene and propylene are difficult to transport downward, they are mainly extended downward in the form of polyethylene and polypropylene.
This will have a particularly big impact on the entire olefin industry, which is the rapid growth of production capacity. Especially for the two industries of ethylene and propylene, there may be fierce competition in the future, which will have a relatively large impact on the price of ethylene monomer. If we look at the coal chemical industry and methanol to olefins, basically what we are talking about on the left is the problem of coal chemical industry, that is, every time a meal of ethylene is produced, whether it is carbon dioxide emissions or water pollution, or water consumption, coal chemical industry has is the largest. In the area of ethane, the production of ethylene has the lowest carbon dioxide emissions. At the same time, Northwest has just mentioned that because it is very difficult to produce ethylene or propylene monomer and transport it, more and more production is done through integrated routes such as polypropylene and polyethylene. Therefore, it is more cost competitive in comparison. That is to say, if we take coal, methanol and polypropylene as an example, methanol is the least economical to produce a ton of polypropylene and transport it to East China and transport methanol and coal. So this is why in the northwest region it is not as economical as before. Methanol will be transferred to East China and North China.
As for MTO, its competitiveness will become weaker and weaker. Mainly because it is a product provided by relatively high oil prices. If the oil price is at a relatively low level, we can see that 3 tons of methanol can produce 0.5 tons of ethylene and 0.5 tons of propylene. Basically, it is difficult to make a good profit. level. As for the methanol industry, it is in a very balanced state globally. Once the MTO plant starts operating, the demand for methanol will increase. In this case, the price of methanol will rise significantly. When the factory reduces its load, methanol prices will go down again. So it’s basically like a shadow here. When olefin prices fluctuate upwards, methanol prices will also fluctuate upwards and downwards. Overall, the methanol-to-olefins industry is not going to be very good.
Ethylene is mainly used to make ethylene oxide, because ethylene oxide is basically used to make ethylene glycol downstream, which is a very complete chain. From a global perspective, the new supply is mainly in Northeast Asia and North America, and the demand is mainly for ethylene glycol. The entire operating rate, whether in the Middle East or North America, will remain at a relatively high level. Because ethylene oxide is difficult to transport, it must be completely converted into ethylene glycol or some other product. In the United States, the focus is mainly on ethylene glycol. The main reason is that the United States is the first to have a relatively large volume and has a cost advantage, so there is no need to develop some refined chemicals. Therefore, more ethylene glycol is used to meet local demand and will be exported to Europe and China.
We see that for China, domestic production capacity will be relatively large. From 2011 to 2022, the average annual growth rate will be around 10%. Mainly because it is made of polyester fiber.��
Looking at the level of net profit, there will be relatively large fluctuations in the long term. It is worth mentioning here that using gas heads and oil heads to produce ethylene glycol will be more competitive, especially for gas heads. The main reason is that when using gas heads, it The investment will be relatively small. Therefore, the yield when it is converted into ethylene glycol will be higher in comparison.
We see that the overall supply in the future is basically half and half between coal and ethylene glycol production. But when we see the output, we think that the majority will still use the ethylene method, that is, regardless of Whether to use ethane to crack to ethylene or to use naphtha to crack to ethylene. In this way, its cost is due to its scale advantage and cost advantage. In this case, it is close to the entire consumption power and the entire East China. If it is a block, the competitiveness will be stronger in comparison.
China’s imports of ethylene glycol will decrease slightly, mainly because the cost of ethane cracking to produce ethylene glycol in the Middle East continues to remain at the lowest level in the world, and the level in the United States will also be relatively low. Therefore, the growth in demand here relies more on large-scale refining to meet the demand growth. Coal-to-ethylene glycol may face greater challenges, so the industry will also usher in a reshuffle. </p
