The future of coal-based ethylene glycol is uncertain
Thread Content
Since 2008, amid falling oil prices and weak demand in downstream sectors, the price of ethylene glycol dropped from 13,000 yuan per ton at the beginning of the year to a low of 3,800 yuan per ton; it has now risen to 4,500 yuan per ton (4,800 yuan per ton in the Northeast region). In the short term, it will continue to rise slightly due to strong ethylene prices; however, as demand from downstream industries remains weak and oil prices are low, whether prices can rebound significantly in the future will depend on the trend of oil prices. Such low prices for ethylene glycol are placing significant pressure on the Tongliao Jinmei coal-based ethylene glycol project, which is currently under construction; the commissioning date is expected to be postponed again, with the latest estimate being August or September of this year. To address the low demand for ethylene glycol, the company plans to invest another 100 million yuan to modify part of the facility so that it can produce 10 tons per year of oxalic acid, with the overall capacity of the facility being 150,000 tons of ethylene glycol and 100,000 tons of oxalic acid, thereby increasing the flexibility of the facility. What is the current market situation for oxalic acid in China, and what is its production capacity? It hasn’t been studied, so the future is uncertain.
The annual demand for oxalic acid in the country is around 300,000 tons, with production being slightly higher than that amount. The annual demand for oxalic acid in China’s rare earth industry exceeds 200,000 tons. At present, the largest oxalic acid manufacturer in China is Shanxi Yuanping Chemical Industry Co., Ltd., which produces around 70,000 tons of oxalic acid per year. In addition, other oxalic acid manufacturers in the country are relatively small in scale, with low concentration. Once the oxalic acid production capacity at the Danhua Tongliao facility reaches full capacity, it will have a significant impact on the existing oxalic acid market; many small and medium-sized oxalic acid manufacturers will gradually be phased out due to factors such as costs and environmental regulations. By then, the price of oxalic acid is likely to drop sharply first; after many small manufacturers withdraw from the market, its price will gradually rise again. Currently, the price of oxalic acid fluctuates within a narrow range. In early 2008, the price of 99.6% oxalic acid in Yuanping, Shanxi was 5,500 yuan per ton.