Investment in coal chemical industry is accelerating; it is expected to exceed 500 billion yuan by 2020

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This post was last edited by liaifeng on 2018-8-3 at 22:29. Investment in coal chemical industry is accelerating; it is expected to exceed 500 billion yuan by 2020. Author/Source: Date: 2018-03-05. Clicks: 18. Shanxi Lu’an Chemical Co., Ltd. was recently established, and regions such as Shaanxi also plan to launch several new coal chemical projects this year. Investment in the coal chemical industry is accelerating; analysts say that by 2020, investment in this sector in China is expected to exceed 500 billion yuan. 　　Investment in coal chemical industry accelerates. After its establishment, Shanxi Lu’an Chemical Co., Ltd. is mainly engaged in the production, transportation, and sales of coal and coal chemical products. The company will select enterprises within and outside the province that have the conditions and the need for transformation to carry out cooperative transformation projects. Over a period of about 3 years, it aims to establish a production capacity of 800,000 tons of cobalt-based Fischer-Tropsch synthesis products and 400,000 tons of fully synthetic lubricant base oils, thereby creating the largest high-end lubricant production base in China. By the end of the 14th Five-Year Plan period, the chemical industry’s share within Lu’an Group, and indeed within the overall real economy of Shanxi, is set to increase further. 　　Coal chemical industry is an industry that uses coal as raw material and, through chemical processing, converts coal into gaseous, liquid, and solid fuels as well as chemicals, thereby producing various chemical products. Coal chemical industry includes traditional coal chemical industry and new coal chemical industry. Traditional coal chemical industry includes areas such as coal coking, coal calcium carbide, and coal-based ammonia synthesis (fertilizers). New coal chemical technologies include coal-to-methanol, coal-to-olefins, coal-to-natural gas, lignite upgrading, coal-to-ethylene glycol, and coal-to-oil. 　　Since last year, investment in the coal chemical industry has accelerated. Some coal-producing regions and enterprises are increasing their investment in the coal chemical industry. 　　Shandong recently announced that it will establish a **-level coal chemical industry demonstration base in southern Shandong. Shaanxi plans to launch 10 new energy and chemical projects in 2018, with a total investment of over 100 billion yuan, most of which are modern coal chemical projects. 　　Wu Dongdong, an analyst at Zhejiang Securities, told a reporter from China Securities Journal that the coal chemical industry has seen a recovery since last year, with an increase in projects that are being submitted for approval; orders from some companies that manufacture coal chemical equipment have also increased significantly. 　　Wu Dongdong said that as the prices of various chemical products continue to rise and coal chemical technology improves, the economic viability of the coal chemical industry increases, which in turn attracts more investment. Furthermore, against the backdrop of coal companies reducing their production capacity, these companies have seen an improvement in their profits and better cash flows, enabling them to undertake capital expenditures. A combination of various factors is driving accelerated investment in the coal chemical industry. 　　Or a market worth hundreds of billions? Industry experts say there is a huge demand gap for new types of coal chemical products. Methanol, olefins, natural gas, ethylene glycol, oil products, and other materials involved in new coal chemical industries are all essential basic chemical products for economic development. At present, these products are mainly produced by domestic petrochemical and new coal chemical enterprises, as well as imported from abroad. Due to the shortage of oil resources in our country and the rise in oil prices, new coal chemical industries will become the main force in filling the gap in domestic demand. 　　Wu Dongdong said that the coal chemical industry saw strong order volumes last year, and it is expected that the revenue and profits of related companies will increase significantly this year. Zheshang Securities predicts that by 2020, investment in coal chemical industry in China is expected to exceed 500 billion yuan. Equipment accounts for about half of the investment in coal chemical industry, and future equipment investment is set to reach nearly 300 billion yuan. 　　According to China Coal Energy’s operational data for January, the company produced 56,000 tons of polyethylene and sold 61,000 tons of it, representing year-on-year increases of 80.6% and 154.2%, respectively. It produced 61,000 tons of polypropylene and sold 56,000 tons of it, with year-on-year increases of 110.3% and 229.4%, respectively. 　　Hangyang Co., Ltd. is one of the manufacturers of air separation equipment for Shenhua Ningmei’s coal-to-oil project. The company’s interim financial results show that Hangyang Co., Ltd. achieved a net profit of 344 million yuan in 2017, whereas it had incurred losses in the same period the previous year. The company stated that as the market for air separation equipment recovered in the second half of 2016, the orders for such equipment received by the company in 2016 increased significantly compared to 2015; as a result, the revenue generated from air separation equipment in 2017 saw a notable rise compared to 2016.