Ethylene glycol market analysis

Current Domestic Consumption and Market Analysis of Ethylene Glycol http://www.hc360.com Introduction: Ethylene glycol, also known as glycol or ethylene glycol, is a colorless, clear, viscous liquid. Its molecular formula is C2H6O2, with a molecular weight of 62.07. The freezing point is -11.5°C, the boiling point is 197.6°C, the relative density is 1.1135 (at 20/4°C), and the refractive index is 1.43063； Soluble in water, lower alcohols, glycerin, propanol, acetic acid, pyridine, and aldehydes; slightly soluble in ether; practically insoluble in benzene, carbon disulfide, chloroform, and carbon tetrachloride. Ethylene glycol is an important basic organic raw material in the petrochemical industry, primarily used in the production of polyester fibers, antifreezes, unsaturated polyester resins, lubricants, plasticizers, non-ionic surfactants, and more. It is also utilized in industries such as coatings, photographic developing solutions, brake fluids, and inks. Additionally, it serves as a solvent and medium for ammonium perborate, and is used in the production of special solvents like ethylene glycol ethers, making its applications extremely wide-ranging. I. Current Situation of Domestic Production and Consumption sowie Market Analysis 　　1. Current Production Situation 　　The industrial production of ethylene glycol in China began in the 1960s. Initially, the traditional chloroethanol hydrolysis method was used: chloroethanol reacted with an alkali to produce ethylene oxide, which was then hydrolyzed to yield ethylene glycol. This method consumes a lot of energy, results in low product purity, high production costs, causes severe pollution, and relies on outdated technology; it is not suitable for large-scale production. After the 1970s, with the rise of China’s petrochemical industry, the production of ethylene glycol in the country developed rapidly. Shanghai Petrochemical Company, Jilin Chemical Industry Co., Ltd., Xin* Dushanzi Petrochemical Complex, Yangzi Petrochemical Company, and Beijing Dongfang Chemical Plant, among others, have successively introduced the pure oxygen oxidation process technology from the American company SD to build ethylene glycol production facilities ； Maoming Petrochemical Company, Tianjin United Chemical Co., Ltd., Fushun Petrochemical Company, and others have successively introduced the pure oxygen oxidation process technology from American Shell Chemical Company to build ethylene glycol production facilities. At present, there are 10 ethylene glycol production facilities in China, with a total production capacity of 1.078 million tons per year. The manufacturers are mainly located within Sinopec and CNPC; among them, Sinopec has 6 such facilities, whose combined production capacity amounts to 749,000 tons per year, accounting for approximately 69.5% of China’s total ethylene glycol production capacity ； There are 4 manufacturers belonging to CNPC, with a combined production capacity of 329,000 tons per year, accounting for approximately 30.5% of the total domestic production capacity. Yangzi Petrochemical’s 262,000 t/a ethylene glycol production plant is currently the largest of its kind in China, accounting for approximately 24.3% of the country’s total production capacity ； Next is the 225,000 t/a production facility of Shanghai Petrochemical Company, whose production capacity accounts for approximately 20.9% of the total domestic production capacity. Next is the 159,000 t/a production facility of Jilin Chemical Industry Company, whose capacity accounts for approximately 14.7% of the total production capacity. Table 1 shows the main producers of ethylene glycol in China in 2004. It is estimated that China’s production capacity for ethylene glycol will reach around 2.4 million tons in 2005, which will help alleviate the supply and demand imbalance for this substance in the country. 　　Table 1: Major ethylene glycol manufacturers in China in 2004 (in 10,000 tons/year)
Manufacturer Name | Production Capacity | Ethylene oxide production method | Remarks
Beijing Yanshan Petrochemical Company | 8.0 | SD oxygen method; capacity expanded in July 1998
Liaoyang Petrochemical Fiber Company | 6.0 | UCC oxygen method; originally used the Huls air method, switched to UCC oxygen method in 1989
Fushun Petrochemical Company | 6.0 | Shell oxygen method; capacity expanded in 2000
Jilin Petrochemical Company | 15.9 | SD oxygen method; started production in 1996, capacity expanded in 2002
Beijing Dongfang Chemical Factory | 4.0 | SD oxygen method; started production in 1996
Yangzi Petrochemical Company | 26.2 | SD oxygen method; capacity expanded in 1999
Shanghai Petrochemical Company | 22.5 | SD oxygen method; capacity expanded in 2002
Maoming Petrochemical Company | 10.0 | Shell oxygen method; started production in 1996
Tianjin United Chemical Co., Ltd. | 4.2 | Shell oxygen method; started production in 1996
Xin* Dushanbe Petrochemical Company | 5.0 | SD oxygen method; started production in 1996, capacity expanded in 2002
Total | 107.8

As China’s production capacity for ethylene glycol continues to increase, so does its output. In 1990, China’s ethylene glycol production was only 284,200 tons; it increased to 456,100 tons by 1995, with an average annual growth rate of 9.9% during the Eighth Five-Year Plan period. In 2000, the production volume reached 907,500 tons, and the average annual growth rate during the Ninth Five-Year Plan period was as high as 14.8%. In 2002, China’s production of ethylene glycol was 906,100 tons, an increase of 12.2% compared to 2001, with an average annual growth rate of 5.1% from 1997 to 2002. In 2003, China’s production of ethylene glycol reached 969,300 tons, an increase of 7.06% compared to the same period in 2002. Among them, Shanghai Petrochemical Company’s production of ethylene glycol reached 193,400 tons, accounting for approximately 19.95% of China’s total ethylene glycol production, making it the highest in the country ； Next are Yangzi Petrochemical Company and Jilin Petrochemical Company, whose production volumes reached 180,200 tons and 171,100 tons respectively, accounting for approximately 18.59% and 17.65% of China’s total ethylene glycol production. They rank second and third in the country respectively. 　　2. Import and export situation: Although China’s production capacity and output of ethylene glycol are growing rapidly, strong demand from industries such as polyester means that these levels are still not sufficient to meet the increasing demand in the domestic market. As a result, large amounts of ethylene glycol must be imported each year, with import volumes on the rise year by year. According to customs statistics, China’s imports of ethylene glycol were only 205,400 tons in 1995; this figure exceeded 1 million tons by 2000, reaching 1,049,700 tons, and further increased to 2,145,700 tons in 2002. Imports accounted for approximately 71.1% of the country’s total domestic consumption. In 2003, China’s imports of ethylene glycol reached 2.2789 million tons, an increase of 17.3% compared to 2002. 　　In recent years, the consumption of ethylene glycol in our country has been increasing continuously. In 1990, China’s apparent consumption of ethylene glycol was only 315,500 tons; this figure rose to 656,800 tons by 1995. The average annual growth rate of apparent consumption from 1990 to 1995 was 15.8% ； In 2000, China’s apparent consumption of ethylene glycol reached 1.9571 million tons, with an average annual growth rate of 24.40% from 1995 to 2000 ； In 2002, the apparent consumption volume exceeded 3 million tons, reaching 3.0199 million tons, making it the world’s largest consumer of ethylene glycol, surpassing the United States. In 2003, the apparent consumption volume increased further to 3.4620 million tons, an increase of about 14.64% compared to 2002. The supply and demand situation of ethylene glycol in China in recent years is shown in Table 2. Table 2: Supply and demand situation of ethylene glycol in China in recent years (in 10,000 tons per year)
Year: 1995, 1996, 1997, 1998, 1999, 2000, 2001, 2002, 2003
Production: 45.61, 55.89, 70.74, 74.97, 84.38, 90.75, 80.75, 90.61, 96.93
Imports: 20.54, 23.06, 19.93, 30.82, 56.69, 104.97, 159.71, 214.57, 251.61
Exports: 0.46, 0.10, 2.36, 0.52, 0.013, 0.015, 0.23, 3.19, 2.34
Apparent consumption: 65.69, 78.85, 88.31, 105.27, 141.06, 195.71, 240.23, 301.99, 346.20

At present, ethylene glycol in China is mainly used in the production of polyesters and antifreeze. In 2003, 83.8% of it was used to produce polyester products, while 16.2% was used for the production of antifreeze and other products. 　　In recent years, the production of PET polyester in China (including polyester fibers, polyester resins, and films) has developed rapidly. In 2000, the production capacity was approximately 5.95 million tons per year; it increased to around 11.02 million tons per year in 2002, and reached about 14.5 million tons per year in 2003. The main manufacturers include Jiangsu Yizheng Chemical Fiber Co., Ltd. (with a production capacity of 1.08 million tons per year), Zhejiang Yuandong Chemical Fiber Group Co., Ltd. (with a production capacity of 0.4 million tons per year), Liaoyang Petrochemical Fiber Company (with a production capacity of 0.387 million tons per year), Shanghai Petrochemical Co., Ltd. (with a production capacity of 0.365 million tons per year), Zhejiang Hengyi Group Co., Ltd. (with a production capacity of 0.35 million tons per year), Xiamen Xianglu Textile Fiber Co., Ltd. (with a production capacity of 0.32 million tons per year), Guangdong Kaiping Polyester Enterprise Group Co., Ltd. (with a production capacity of 0.3 million tons per year), Jinan Zhenghao New Chemical Fiber Materials Co., Ltd. (with a production capacity of 0.26 million tons per year), Tianjin Petrochemical Company (with a production capacity of 0.2 million tons per year), and Luoyang Petrochemical Company (also with a production capacity of 0.2 million tons per year). In 2003, China’s production of PET polyester products was approximately 8.5 million tons, with about 2.9 million tons of ethylene glycol being consumed – a figure that accounted for 83.8% of the total domestic consumption of ethylene glycol. It is estimated that by 2005, China’s PET polyester production capacity will reach 16.0 million tons per year, with production volumes reaching 12.8 million tons; at that time, the consumption of ethylene glycol will be around 4.35 million tons. In 2003, China’s consumption of ethylene glycol for use in antifreeze and other applications (including the production of glyoxal, oxalic acid, alkyd resins, dioxane, 1,3-dioxolane, polyethylene glycol, unsaturated polyesters, etc.) was approximately 562,000 tons; it is estimated that this figure will reach around 650,000 tons by 2005. It can be seen that in 2003, China’s total consumption of ethylene glycol was approximately 3.462 million tons, and by 2005 this figure was expected to reach around 5.0 million tons. II. Development Recommendations (1) Currently, the world’s total production capacity for ethylene glycol is approximately 15.862 million tons per year, while consumption is around 14.2 million tons per year. It is estimated that by 2007, the world’s total production capacity for ethylene glycol will exceed 22.5 million tons per year, with consumption reaching around 16.16 million tons per year. At that time, there will be a surplus in production capacity, leading to more intense competition in the market. 　　(2) At present, China’s production capacity for ethylene glycol is approximately 1.078 million tons per year. In 2003, the production volume was around 969,300 tons, while the consumption volume was about 3.462 million tons. Since production could not meet demand, imports amounted to 2.516 million tons. Approximately 83.8% of this product is used in the production of polyester products, while 16.2% is used to manufacture antifreeze and other products. With the continuous development of China’s polyester industry, the consumption of ethylene glycol will keep increasing. It is estimated that by 2005, China’s consumption of ethylene glycol will reach around 5.0 million tons, and at that time there will still be a deficit of about 2.6 million tons that needs to be covered through imports. Therefore, ethylene glycol will continue to have good prospects for development in China. 　　(3) Overall, there is an oversupply of ethylene glycol production capacity worldwide, while consumption in Asia, particularly in China, continues to rise. This will inevitably lead to an influx of more foreign products into our country, posing a certain threat to the future development of China’s ethylene glycol industry. At present, China has a low capacity for ethylene glycol production, with limited output, small-scale facilities, relatively backward technology, high production costs, and poor economic efficiency, resulting in a lack of competitiveness in both domestic and international markets. Therefore, it is necessary to actively adopt advanced technologies to expand the production scale of these facilities, thereby reducing production costs, improving output and quality, and enhancing China’s competitiveness in the global market for ethylene glycol. Additionally, it is also possible to consider introducing the latest foreign production technologies and building several large-scale ethylene glycol production facilities with a capacity of over 300,000 tons per year, in order to fundamentally resolve the imbalance between supply and demand for ethylene glycol in our country. 　　(4) In terms of production processes, the catalytic hydration of ethylene oxide can **reduce the water ratio, save energy consumption, and lower production costs ； The vinyl carbonate method can make full use of the CO2 generated as a by-product of ethylene oxidation. Within existing ethylene oxide production facilities, it is sufficient to add a reaction step for the production of vinyl carbonate, thereby enabling the manufacture of both vinyl carbonate and dimethyl carbonate – two widely used chemical products. This approach represents the future direction for the development of ethylene glycol production and is highly attractive. At present, ethylene glycol in China is produced through the direct hydration of ethylene oxide, and technical parameters such as energy consumption and material usage still fall far behind international advanced levels. Therefore, in addition to continuously improving existing technologies, it is also necessary to actively keep up with the global trends in ethylene glycol production technology in order to raise the overall production technology level of ethylene glycol in China. Furthermore, by making full use of China’s relative abundance of coal and natural gas resources, efforts should be intensified to develop technologies for the direct production of ethylene glycol from syngas, thereby opening up new routes for ethylene glycol production in the country. (5) At present, ethylene glycol products in our country are mainly used in the production of polyesters, resulting in a relatively limited range of applications. If the production of polyesters is disrupted, it will deal a fatal blow to China’s ethylene glycol industry. Therefore, attention should be paid to the development of other application areas for ethylene glycol, in order to gradually change the situation of its relatively limited uses in China and increase its consumption.

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