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Coal-based ethylene glycol: Production levels on the rise / Author/Source: Coal Chemical Industry Information Network / Date: 10-22-2019 / Clicks: 43. In the third quarter, as the price of ethylene glycol increased, the operating rate of coal-based ethylene glycol plants rose gradually, with an average operating rate of 54.22%. By the time after the National Day holiday, this operating rate had risen from 43.31% in August to 73.84%. Some of these plants stated that their annual contracts had not yet been finalized, and they would likely maintain high levels of production before the New Year; they would also be negotiating and signing new contracts for next year. Given the weak expectations for the ethylene glycol market next year, this will have an impact on the signing of those contracts. Although supply volumes and capacity have increased in recent years, the growth rate has been slow; as a result, these levels still cannot meet the demands of polyester factories. In terms of product quality, improvements have been made through technological advancements, and polyester manufacturers are also increasing the proportion of ethylene glycol produced from coal in their products. Due to the varying stability of catalysts used in the production of ethylene glycol from coal, it is generally not recommended to store such ethylene glycol for long periods. In China, the storage capacity for ethylene glycol produced from coal is usually limited, so factories opt for a sales model that involves maintaining low inventory levels. The recent increase in the production rate of ethylene glycol from coal has had an impact on the supply of this product in the domestic market. In recent years, the proportion of contracts signed between suppliers and downstream polyester plants has increased, with coal-based ethylene glycol products accounting for over 80% of sales in the polyester industry. Next are applications in areas such as unsaturated resins and antifreeze, accounting for 6% and 5% respectively. Pharmaceuticals, coatings, and other sectors account for approximately 7% of the total. To avoid shortages in raw material supply, polyester manufacturers primarily purchase ethylene glycol through long-term contracts at 90% of the market price, with an additional 10% purchased as spot goods; there is no fixed quantity specified in these contracts. Among the ethylene glycol supplied under such long-term contracts, coal-based ethylene glycol and petroleum-based ethylene glycol account for a ratio of 3:7. In 2019, the capacity expansion project of Xinjiang Tianye in the production of coal-based ethylene glycol operated smoothly. Additionally, the 400,000-ton coal-based ethylene glycol plant owned by Yankuang Rongxin, as well as the 200,000-ton plant in Yongcheng Phase II, were yet to come online. Before the New Year, there were limited orders for downstream users, and these orders were mostly unstable short-term ones. The overall outlook for the industry was weak, which continued to put pressure on companies involved in the production of coal-based ethylene glycol.