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Investment opportunities in coal chemical industry surge -------------------------------------------------------------------------------- [Author: Hou Jie; Source: China Chemical Industry News; Views: 21; Article submitted by:] Last weekend, international oil prices once again reached a high of $100. After international oil prices crossed $100 in January this year, they paused for a month; this is another rebound following that pause. Industry experts believe that high oil prices will be beneficial to the coal chemical and calcium carbide industries, with chemical companies that use coal and calcium carbide as raw materials reaping significant benefits. It is understood that the A-share market is currently experiencing wide fluctuations, but coal chemical stocks have shown strong performance one after another. Industry experts believe this is mainly driven by high oil prices. Han Yizhuo, a researcher at the Shanxi Coal Chemistry Institute of the Chinese Academy of Sciences, said in an interview with reporters that the coal chemical industry has the potential to replace the petroleum industry in supporting the sustainable development of the economy and society in the future. Coal chemical enterprises that use coal as raw material enjoy a greater cost advantage over chemical enterprises that use oil and natural gas as raw materials. For products such as coal tar, synthetic ammonia, and methanol, their prices can increase as oil prices rise. In particular, companies that produce products with supply shortages such as polyvinyl chloride, terephthalic acid, and diphenylmethane diisocyanate have enhanced ability to adjust prices. Some financial industry analysts also believe that as long as crude oil prices remain around $40 per barrel, the production cost of polyvinyl chloride produced by the calcium carbide method has a relative advantage over that of the ethylene method. In other words, the investment opportunities in coal chemical stocks mainly stem from high oil prices. Lower coal prices compared to oil will rapidly improve the profitability of companies whose industrial chains start with coal chemical processing. More importantly, high oil prices have also made coal-to-oil and coal-to-methanol processes more economical, offering the coal chemical industry new market opportunities. Fan Jinjun, chairman of Henan Kaifeng Jinkai Chemical Co., Ltd., said in an interview that high oil prices are certainly beneficial to the development of basic chemical industries that use coal as a raw material; the market for coal-based chemical products is likely to be good in the coming period. As for some basic chemical industries that are crucial for the country’s economy and people’s livelihoods, such as the fertilizer industry, supply shortages will certainly occur due to insufficient raw material supplies. Under such circumstances, the medium- and long-term plans for the development of the coal chemical industry fail to be formulated, which causes great distress to coal chemical enterprises. It is hoped that industry policies for the coal chemical sector will be introduced as soon as possible, to guide enterprises in advancing the development of domestic industries more effectively.