What keeps coal-based ethylene glycol in demand?

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What is driving the continued popularity of coal-based ethylene glycol? Author/Source: Huahua Network Date: 2017-09-19 Clicks: 12 Since 2017, the Jiangsu and Zhejiang regions have undergone the strictest environmental protection measures in history; yet the capacity utilization rate of ethylene glycol manufacturers has increased further, resulting in a record-high monthly production volume of ethylene glycol in China. Data shows that in August 2017, the total domestic production of ethylene glycol exceeded 500,000 tons, reaching 528,100 tons, a 46.33% increase compared to the same period last year. Among them, the production of ethylene glycol derived from coal reached 139,000 tons, hitting a record high and accounting for 26.32% of the total domestic production. Entering 2017, there were continuous reports of coal-based ethylene glycol projects being signed or planned. According to incomplete statistics, there were over 10 projects from January to August 2017. http://img.yf116.cn/image/img/20170919/859283236842.jpg http://img.yf116.cn/image/img/20170919/90113241144.jpg According to statistics on projects under construction, China’s ethylene glycol production capacity will reach 17.59 million tons by 2021. http://img.yf116.cn/image/img/20170919/90453244537.jpg Public data shows that the current planned production capacity for ethylene glycol is 22.36 million tons; once all facilities are put into operation, this capacity will reach nearly 40 million tons. Behind the impulse: High expectations for substantial profits. Statistics show that since the second half of this year, the price of ethylene glycol has been on the rise. As of mid-September, the spot price of ethylene glycol had increased by over 1,000 yuan, and production profits have also improved significantly compared to earlier periods. Taking the average price of ethylene glycol in August as an example, the profit margin for ethylene glycol produced via the ethylene route is around 35 dollars per ton, while the profit margin for ethylene glycol produced using the MTO method is around 1,000 yuan per ton. The profit margin for coal-based ethylene glycol is even higher than that of the other two methods. The high profits associated with ethylene glycol products have also directly encouraged domestic ethylene glycol manufacturers to increase their production of such products. It is understood that since the third quarter, the operating rates of various manufacturing processes in the country have remained at a relatively high level. Although the operation rate dropped temporarily in the second quarter due to planned maintenance by some companies, as well as equipment upgrades in coal-based enterprises resulting from stricter environmental regulations, it remained around 80% in the remaining months; the operation rate for methanol-to-ethylene glycol even stayed above 100% throughout that period. http://img.yf116.cn/image/img/20170919/91483250826.jpg Driven by high profits and a large demand gap, the new production capacity for ethylene glycol is set to maintain a steady growth rate in the future. As can be seen from the table above, in 2017, some new production capacity for ethylene glycol was introduced into the market in China, with an estimated additional capacity of 1.06 million tons. Moreover, in terms of sheer quantity, coal-based ethylene glycol manufacturers will remain the main force behind new capacity additions in the future. In the future, the situation in which China relies heavily on imports for ethylene glycol will gradually change.