【Top Chemical Industry News of the Week】

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1. Full commissioning of Hengyi Brunei PMB petrochemical project. According to a statement from Hengyi Petrochemical, the project’s construction and equipment installation and testing tasks have been completed; the utility systems were put into operation in March, and the main units of the project were fully commissioned in July. At present, all units of the PMB petrochemical project have entered the commissioning phase, and it is expected that they will soon enter commercial operation. The project is owned 70% by the Chinese side and 30% by Brunei. The total investment for the first phase is 3.45 billion dollars, intended to establish a crude oil processing capacity of 8 million tons, as well as production capacities for 1.5 million tons of p-xylene and 500,000 tons of benzene, in addition to 6 million tons of products such as gasoline, kerosene, and diesel. The second-phase plan increases the crude oil processing capacity to 14 million tons, with the production of 2 million tons of p-xylene and products such as ethylene. 2. Guidelines for evaluating qualified suppliers in the petrochemical industry issued; the first regulatory document specific to supplier sourcing and management in this industry has been released. The document \"Procedures for Evaluating Qualified Suppliers in China’s Petroleum and Chemical Industry (Interim)\) was compiled by the China Petroleum and Chemical Industry Federation. The “Document” sets clear regulations on aspects such as the entry requirements for suppliers in the petrochemical industry and the approval process. The admission criteria include the supplier’s financial condition, R&D capabilities, procurement management skills, quality management capabilities, production management capabilities, after-sales service, HSE and social responsibility, human resources, as well as its key performance in the petrochemical industry over the past 3 years. By combining these standards, more valuable information will be provided for corporate procurement decisions. After several years of rigorous screening, the database of qualified suppliers in China’s petroleum and chemical industry now includes over 1,100 suppliers, whose products cover various categories such as petrochemical equipment and general-purpose equipment. 3. Industry disputes over the prospects of coal-based ethylene glycol Production of ethylene glycol from coal once had high prospects in the industry due to supply and demand constraints; however, with rapid expansion of production capacity in recent years, ethylene glycol prices have been falling steadily since last year, leading to differing opinions within the industry regarding its future prospects. Under the pressure of weak demand downstream, domestic capacity expansion, and a surge in imports, ethylene glycol prices have been on a continuous decline since the fourth quarter of 2018. The market price is only around 4,500 yuan per ton, which is half of last year’s price; as a result, most coal-based ethylene glycol manufacturers are operating at a loss. Despite the sluggish market, new production capacity continues to increase. Between 2018 and 2020, China added nearly thirty new projects for producing ethylene glycol from coal (syngas), with a total production capacity exceeding 1,000 tons. By 2020, China’s total production capacity for ethylene glycol is set to reach nearly 3,000 tons, making overcapacity inevitable; as a result, ethylene glycol prices may remain low for an extended period. “Given the current basic balance between supply and demand for ethylene glycol globally, the lower costs of ethylene glycol in the Middle East and North America, and the fact that most of the new production capacity needs to be absorbed domestically, the rapid expansion of China’s ethylene glycol production capacity undoubtedly increases the risk of overcapacity. ”Li Dapeng, a leading expert in the coal chemical industry at Yanchang Petroleum Group, expressed concerns regarding the prospects of producing ethylene glycol from coal (syngas). However, some experts hold different views. Takao Takashio, founder and chairman of Nippon Kako Kogyo Co., Ltd., says that from a planning perspective, there is a risk of overcapacity, but alternative plastics open up broader prospects for the ethylene glycol industry. Sun Yucheng, deputy general manager of Suzhou Shuanghu Chemical Technology Co., Ltd., also said that at the current rate of expansion, there is indeed a risk of overcapacity in the ethylene glycol industry. However, the future use of ethylene glycol will not be in polyesters, but rather in reacting with polyoxymethylene to produce modified polyesters. This modified polyester can have a wider range of applications. 4. Hengyi’s high-end green chemical and fiber integration project has been established in Qinzhou, with a total investment of around 45 billion yuan. This integrated project aims to foster cross-regional cooperation under the Belt and Road Initiative as well as to develop high-end green chemical and fiber production facilities for the ASEAN region; it includes sub-projects such as caprolactam-nylon and PTA-polyester. The raw material, benzene, will be transported directly from oil refineries in Brunei to Qinzhou, and taking advantage of the regional and port advantages, the products will be sold in the central, southern, and western regions as well as in other ASEAN countries. 5. Comprehensive control plan for volatile organic compounds in key industries released: The Ministry of Ecology and Environment issued a notice on the publication of the \"Comprehensive Control Plan for Volatile Organic Compounds in Key Industries\". The Plan states that by 2020, a sound management system for the prevention and control of VOCs (volatile organic compounds) will be established; significant progress will be made in addressing VOCs issues in key areas and industries, thereby achieving the goal set out in the 13th Five-Year Plan to reduce VOCs emissions by 10%. The key industries include: comprehensive control of VOCs in the petrochemical industry, comprehensive control of VOCs in the chemical industry, comprehensive control of VOCs in the storage, transportation, and sales of petroleum products, and comprehensive control of VOCs in industrial parks and industrial clusters. The comprehensive control of VOCs in the petrochemical industry mainly includes large-scale oil refining and chemical industries. Efforts to manage synthetic resins, fibers, etc. Strengthen the control of VOCs from various sources such as leaks at sealing points, wastewater and circulating water systems, storage tanks, the loading and unloading of organic liquids, and process exhaust gases, to ensure stable emissions that meet regulatory standards. 6. The Jihua Oil and Chemicals Industry Chain project is scheduled to be completed and put into operation in 2021. The Jihua Oil and Chemicals Industry Chain project, undertaken by Jihua Group Oil and Chemicals (Daqing) Co., Ltd. with a total investment of 17 billion yuan, has begun construction in the Linyuan Chemical Industrial Park. The total planned investment for this project is 17 billion yuan, to be implemented in two phases. Phase 1 requires an investment of 8.7 billion yuan, during which facilities for producing 260,000 tons of ethylene oxide, 300,000 tons of phenol/cresol, and 240,000 tons of polycarbonate (including 210,000 tons of diphenyl carbonate, 70,000 tons of dimethyl carbonate, 210,000 tons of bisphenol A, 70,000 tons of PC/ABS alloys, and other related products) will be built. This project primarily utilizes the ethylene and propylene raw materials supplied after the Daqing Petrochemical Project comes online to produce products such as ethylene oxide, polyethers, phenol propionate, bisphenol A, polycarbonates, and PC/ABS alloys. It can supply new chemical materials for industries such as aerospace, automotive, construction, electronics, and intelligent equipment. 7. The full isobutylene feed alkylation unit at Hengli passed the performance tests. The 300,000-ton-per-year full isobutylene feed alkylation unit as part of Hengli Petrochemical (Dalian) Co., Ltd.’s 20 million tons per year integrated refining and chemical processing project met all performance requirements from the first attempt. The product has an octane number as high as RON95, an alkylation oil yield of 95%, and a dry point below 205°C. It is reported that this device utilizes DuPont STRATCO® alkylation technology, and achieved a successful start-up in April of this year.