Facing continuous setbacks, what is the future of coal-based ethylene glycol?
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Facing continuous setbacks, what is the future of coal-based ethylene glycol? Author/Source: Date: 2017-03-13 Clicks: 37 Recently, coal-based ethylene glycol has become a topic of discussion in the industry. On February 22, a news item titled \"Predicted Losses in 2016: Leading Producer of Coal-Based Ethylene Glycol May Face Delisting\" brought coal-based ethylene glycol to the center of public attention. The listed company Danhua Technology previously issued a statement stating that its net profit for 2016 was expected to be around -166 million yuan, which could lead to a warning regarding the risk of delisting. Since Danhua Technology is a leading company in the production of ethylene glycol from coal, some public opinions have expanded from specific cases to broader conclusions, suggesting that an alarm may soon be sounded regarding the market for ethylene glycol produced from coal. Earlier, there was another even more damaging piece of news regarding coal-based ethylene glycol. On February 8, Rongsheng Petrochemical stated on the Shenzhen Stock Exchange that the quality of coal-based ethylene glycol products at present is not yet sufficient to meet the requirements of the polyester industry, and the company is not considering using coal-based ethylene glycol as a raw material for now. Affected by this news, some articles claimed that a major crisis would hit coal-based ethylene glycol production, sparking a huge reaction in the industry. Leading companies incur losses, and large downstream users do not agree to this. This poured cold water on the enthusiasm for investing in coal-based ethylene glycol production, casting a shadow over its development. What is the actual situation of coal-based ethylene glycol, and how should it develop? Facing the issues: Although some articles use inaccurate wording and certain claims are even exaggerated, it is undeniable that coal-based ethylene glycol does have certain shortcomings and problems that the industry needs to address. In summary, the main problems associated with coal-based ethylene glycol are as follows. The first issue is technical: the technology for producing ethylene glycol from coal has not yet reached full maturity. Some facilities for this purpose operate unstably, making it difficult to ensure continuous full-load operation over extended periods; as a result, energy and material consumption are high, leading to elevated production costs. The quality of this product cannot completely replace petroleum ethylene glycol; it can only be used in combination with it, at a low proportion. Due to the poor quality, low output, and unstable supply of coal-based ethylene glycol, it fails to gain full acceptance from users. The second is an economic issue. With low oil prices, the original competitive advantages of coal-based ethylene glycol have been significantly weakened. The economic advantage of coal-based ethylene glycol requires international crude oil prices to exceed $65 per barrel. Moreover, the short-term peak oil price was only 65 dollars per barrel; therefore, coal-based ethylene glycol will be at a economic disadvantage in the near future. And coal-based ethylene glycol needs to rely on low prices to enter and capture the market, making it difficult to achieve both market share and profits. Third is the market issue. The potential risk of overcapacity is high. China has a shortage of ethylene glycol, with a domestic self-sufficiency rate of only 30%. According to statistics, China’s imports of ethylene glycol reached 8.77 million tons in 2015. However, on a global scale, there is an overcapacity in ethylene glycol production, with supply far exceeding demand. Looking at the composition of ethylene glycol consumption, polyesters account for over 90% of it, and currently the proportion of ethylene glycol produced from coal is only 10%-20%; therefore, there is not much room for market expansion in this area. On the one hand, the market space is limited; on the other hand, new projects are being launched in large numbers. It is reported that 2017 will mark the beginning of a surge in China’s coal-based ethylene glycol production capacity, with 8 new projects adding up to 1.34 million tons per year of ethylene glycol production capacity. By 2020, China will have built a total of 41 coal-based ethylene glycol production projects, with a combined capacity of 10.26 million tons. If all these production capacities are realized as scheduled, combined with the existing capacity, there will be a genuine surplus of ethylene glycol at that time. View it dialectically: although coal-based ethylene glycol has its various problems, it is not entirely hopeless or useless. While acknowledging the shortcomings of coal-based ethylene glycol, we should also see its advantages. Coal-based ethylene glycol should not be dismissed either; technically, progress is being made in this area. The \"coal-to-ethylene glycol\" production technology developed by Tongliao Jinmei Company has been recognized and approved by the Chinese Academy of Sciences, and it has also been listed as one of the five key demonstration projects in China’s coal chemical industry. On February 19 this year, the construction of a new-generation industrial pilot project for coal-based ethylene glycol production at the Fujian Institute of Material Structure, Chinese Academy of Sciences, began in Xingren County, Guizhou Province. It is reported that, compared to the first-generation technology, the second-generation coal-based ethylene glycol production technology further optimizes the process flow; it enables a reduction in the amount of precious metals used as catalysts and replaces toxic metals. This results in improved catalyst performance and longer lifespan, significant cost reductions, and enhanced environmental sustainability of the technology. In terms of project operation and product quality, coal-based ethylene glycol is not entirely uncompetitive. The ethylene glycol production plant using 50,000 tons of syngas per year, part of Xinjiang Tianye’s Phase I project and renowned for its low costs, has been operating safely, for extended periods of time at high load levels, for over forty months now. The average annual load in 2015 was 104%, with the peak load exceeding 110%; the quality grade reached 95%. Since June 2016, Ordos Xinhang Energy’s 300,000 tons per year ethylene glycol production facility has been producing over 1,000 tons of ethylene glycol per day, with all three production lines operating stably at elevated capacity. The products serve the antifreeze market in the north, as well as the polyester preforms, short fibers, and filament industries in East China. Strategically, developing coal-based ethylene glycol is also a viable option. China’s energy endowment features a shortage of oil and gas, with coal being relatively abundant. **Advocacy is made for the deep processing of coal, considering it an important source for diversifying the supply of oil products, natural gas, and petrochemical raw materials. This helps to ensure **energy security and economic security**. From the current reality, comparatively speaking, the economic viability of coal-to-ethylene glycol is still better than that of coal-to-oil and coal-to-gas. Turning pressure into motivation, this public opinion storm can, in a sense, also be considered a good thing for the coal-based ethylene glycol industry. It was like pouring a bucket of cold water on the booming coal-based ethylene glycol industry, helping more impulsive investors to sober up and reconsider their decisions ； It also helps to urge the coal-based ethylene glycol industry to accelerate technological progress and improve production processes as well as product quality. On the one hand, it is necessary to strictly control production capacity and improve quality. With low global oil prices, coal-based ethylene glycol lacking competitiveness, no fundamental technological breakthroughs yet achieved, and product quality not meeting polyester standards, large-scale capacity expansion should not take place. New expansion projects must be decided on carefully, with thorough research into various technical, economic, and environmental aspects, and should not be launched in a hasty manner. On the other hand, focus on technological innovation and upgrade demonstration projects. New coal-to-ethylene glycol technologies are being developed to improve product quality and operational stability. Regarding catalysts, it is necessary to further improve their activity, reduce the amount of precious metals used as well as production costs, and lower the requirements imposed by catalysts on the manufacturing process. In terms of process technology, research on large-scale reactors should be carried out to increase the size of individual units; reaction conditions need to be optimized, and energy consumption should be reduced through further process integration.
Oh, we’re about to install an ethylene glycol plant here. . . . .
Production costs are definitely lower than those of oil, but environmental protection technologies also need to advance simultaneously
To strictly prevent the problem of overcapacity is nothing short of mutual destruction
Great article. Does any friend have the contact information for Inner Mongolia Xinhang Energy Instruments? Please help provide it; I have some questions I’d like to ask. Thank you all, experts!
This post was last edited by z2h on 2018-12-20 11:57. Excess? I’m dying of laughter? Just speculation? I was involved in methanol production 20 years ago; at that time the capacity was 100,000 tons, the largest in the country. They all say it’s too large; there’s an oversupply of it in China already. Over these twenty years, each new methanol project that has been launched has had a capacity of over one million tons, and new projects continue to be added; yet I haven’t seen any excess capacity in the methanol sector! For the methanol project, people are still coming up with various ways to proceed. Ten years ago, when MTO technology for producing olefins from coal was introduced, people said that it couldn’t compete with the petroleum-based methods. Throughout those ten years, there were claims of overcapacity, but in reality no such overcapacity has ever been observed. In 2018, 1.8 million tons of methanol were used to produce 600,000 tons of olefins, generating a profit of over 600 million yuan – so how can overcapacity still result in profits? A considerable amount of coal-based ethylene glycol is being produced these days, but the annual production volume across the country remains below 10 million tons – which is far less compared to the time when methanol was produced. Currently, the development of coal chemical industry in China is at the world’s leading level. We do not feel proud, because there are many unsung people who work hard and dedicate themselves tirelessly – this is part of the Chinese character. The emergence of new technologies is bound to impact older ones; those who work with the old technologies will go ahead and slander the new ones – this is just part of Chinese behavior. Don’t you realize that new technologies are also constantly being improved? It’s normal for the new coal chemical industry to pose a challenge to those chemical industries that relied on oil for production in the past. Those in the oil industry claim that coal chemistry isn’t effective; I really don’t understand why oil-related industries suffer losses while coal chemistry generates profits Be a positive and proactive chemical industry professional! ! ! ! ! ! ! ! ! ! ! ! !