The coal chemical industry has cost advantages over a long period of time
Thread Content
According to China Securities News, today the online presentation for the initial public offering of A shares by China National Coal Energy Corporation was held on China Securities Journal·China Securities Network. In response to investors’ question regarding the economic viability of the company’s development in the coal chemical industry, Jing Tianliang, the chairman of China National Coal Energy Corporation, stated that compared with the petrochemical industry, the coal chemical industry offers significant cost advantages. From the perspective of alternative energy, coal-based alcohol ether fuels have a cost advantage when oil prices are at least 35 dollars per barrel ； Coal-based olefins have a cost advantage when oil prices are at least $40 per barrel. Currently, international oil prices are near $90 per barrel and show a tendency to rise further; therefore, the coal chemical industry has a cost advantage over the long term.
The coal chemical industry is booming; equipment and materials are becoming more expensive, and it’s difficult to transport equipment
I do think the above conclusions have certain limitations, as they fail to take into account China’s current coal prices, especially transportation costs. If coal prices rise to 1,200 yuan per ton, will coal chemical industry still hold an advantage? Therefore, the aforementioned conclusion must have a clear underlying premise, which is what the coal price is.
Coal prices in China are already twice those in the United States.
In the process of development, **all countries sacrifice their cheap resources (including cheap labor) to boost their economies, and China is no exception. So, China’s coal chemical industry has advantages; rather than that, it has an advantage in terms of resource utilization.
It is precisely due to the consideration of locational advantages that the development of coal chemical industries leads to enterprises from various sectors investing in areas where coal mines are located, thereby supporting local economic development and reflecting a certain degree of fairness； Otherwise, just like with natural gas, the coastal and developed regions that possess the country’s best resources will exploit the central and western areas; a single pipeline will be used to transport away the wealth of these already poor regions at low costs, leaving the poor even poorer and the rich even richer.