All 5 large-scale coal chemical projects in the Ordos Dali Park have resumed operations
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At present, various projects in the Ordos Dali Industrial Park, including those related to energy, chemicals, and new materials, are being advanced at a rapid pace. As of the end of May, all five large-scale coal chemical projects – Beikong’s 4 billion cubic meters per year of coal-to-gas production, Yitai’s 2 million tons per year of coal-to-oil production, Guodian Investment’s 800,000 tons per year of coal-to-olefins production, Jiutai’s 600,000 tons per year of olefins production, and Yigao’s 240,000 tons per year of ethylene glycol production – had resumed operations. The Dalu Industrial Park in Zhungeer Banner, Ordos, is currently hosting 5 coal chemical pilot and demonstration projects at the ** level, with a total investment of 133.58 billion yuan. Among these, Beikong’s project for producing 4 billion cubic meters of coal-based gas involves an investment of 23 billion yuan; CNOOC’s similar project costs 274 billion yuan; Hebei JianTou’s project for 4 billion cubic meters of coal-based gas requires an investment of 303 billion yuan; Yitai’s project for producing 2 million tons of coal-based oil involves an investment of 291 billion yuan; and Guodian Investment’s project for producing 800,000 tons of coal-based olefins needs an investment of 237.8 billion yuan. Three of these projects are set to begin construction this year. There are also 4 major projects in the coal, electricity, and aluminum industry, with a total investment of 37.6 billion yuan. Of this amount, 23 billion yuan is invested in power generation facilities to support the electricity transmission line from Mengxi to Tianjin South; 5.46 billion yuan is invested in Shenhua’s 500,000-ton alumina production project, 7.2 billion yuan in Datang’s 500,000-ton alumina production project, and 2 billion yuan in Chinalco’s 200,000-ton alumina production project. It is reported that in this region, efforts are being made to achieve an investment in fixed assets of over 200 billion yuan by the end of the 13th Five-Year Plan period. The coal chemical production capacity is set to increase from 4.82 million tons to over 10 million tons, while the installed power capacity is expected to rise from 6.56 million kilowatts to 10 million kilowatts. The amount of coal processed locally is intended to increase from 18 million tons to over 80 million tons, with a local processing rate of 40%.
As long as pollution and costs are well controlled, such projects should still be carried out; however, the profit margins for the products resulting from projects like those of Beikong are concerning.
There are so many projects; the market is saturated, and yet another batch fails
It is quite difficult for domestic coal chemical enterprises, especially those that produce fertilizer products, to achieve profitability. Coal chemical products are primarily meant to meet domestic market demands, and at present there is an oversupply of both fertilizers and methanol. When trying to export these products abroad, the costs are much higher than those in the Middle East, resulting in no price advantage. There are two lines in coal chemical products: ammonia and methanol. The ammonia line basically has no room for survival, while the methanol line can be expanded to include downstream products of methanol; therefore, this line still offers a path forward. As for other coal chemical routes, such as coal-to-oil, coal-to-gas, and combined power generation, etc. Although there is strong emphasis on promoting coal-to-oil and coal-to-gas conversion at present, this is mainly driven by considerations related to energy security, the energy structure, and the current state of coal chemical industry. If these factors are not taken into account and only the technical and economic aspects are considered, then coal-to-oil and coal-to-gas conversion are not viable options. As for combined power generation, there’s no need to consider it either – electricity production is already severely in excess. Aside from the power generated by a few large power companies that can be fed into the grid, it’s impossible for other generators to send their electricity onto the grid. Furthermore, **the adjustment of the power generation structure is aimed at shifting towards clean energy sources and reducing the proportion of coal-based power generation. Combined cycle power generation also results in high levels of CO2 emissions, which goes against China’s goals of reducing carbon emissions. Although there are no explicit policy restrictions on combined cycle power generation, given the current circumstances, this approach seems to be a dead end for a considerable time to come.
It seems that the development of coal chemical industry in the field of materials should be the future direction
Environmental protection must keep up; currently, it operates on a veto system – if environmental standards are not met, the business is immediately ordered to close
Ultimately, it’s still the market; there’s no issue of supply and demand balance. When supply exceeds demand, prices will inevitably be low, and it will be difficult to increase sales regardless of how much effort is put in
It is an era where products reign supreme, but it seems that even good products quickly become surplus! Hehe