Thread Content
Author/Source: China Chemical Industry News Date: 2009-3-20 -------------------------------------------------------------------------------- The latest survey data from the China Chemical Information Center show that in 2008, China added a total of 7.98 million tons of methanol production capacity; however, most of these facilities have been shut down since operation due to a weak market situation. If all the new methanol production facilities under construction in the country are completed and put into operation this year, the additional production capacity will be at least 5 million tons. Excess production capacity, coupled with the impact of the financial crisis, has drawn attention from industry professionals to the future development direction of methanol in the domestic market. This survey shows that the new methanol production capacity in 2008 was concentrated in Sichuan, Yunnan, Henan, Shandong, Shanxi, Hebei, Inner Mongolia, and the Northeast region. There are 4 enterprises with a production capacity of over 500,000 tons; these are Inner Mongolia Boyuan United Chemical, whose capacity is 600,000 tons ； Shandong Yankuang Guohong Chemical Co., Ltd., with a production capacity of 500,000 tons ； Henan Zhongyuan Dahua Company, with a production capacity of 500,000 tons ； Henan Longyu Coal Chemical Company has a production capacity of 500,000 tons. The newly added methanol production capacity has had a significant impact on the supply and demand dynamics in China’s methanol market, particularly in those areas where the production facilities are located, resulting in noticeable upward pressure on methanol prices. Industry experts point out that the rapid growth of China’s economy has created a high demand for methanol in the country, but it remains uncertain whether China will be able to utilize all the new production capacity that has been added. Although some enterprises have directly built downstream facilities and the uses of methanol have been expanded—such as the introduction of methanol-based gasoline in 14 provinces and municipalities—this is far from sufficient to absorb the rapidly increasing production capacity of methanol as a raw material. In the long run, there is a high likelihood of an oversupply of methanol in the domestic market. Hu Qianlin, director of the Science and Technology Department of the China Petroleum and Chemical Industry Association, noted that the outbreak of this financial crisis has had a severe impact on China’s methanol industry; market prices have plummeted, and many enterprises have had to shut down their production facilities. In addition to factors such as weak market demand and competition from low-priced methanol imported from abroad, this situation also reflects to some extent the overheating of China’s methanol industry in the past, with excessive expansion of production capacity. Downstream demands such as the production of alcohol-ether fuels from methanol and the production of olefins from methanol have not materialized as expected, and the pace of capacity expansion has far exceeded the growth rate of market demand. Therefore, Hu Qianlin believes that it is necessary to curb the blind expansion of its production capacity. He suggested that some small-scale facilities that lack competitiveness could be shut down. The newly installed methanol plant is intended to have a production capacity of over 600,000 tons, and its development path should focus on integrated multi-product production, thereby achieving an integrated development model that combines coal utilization, chemical processing, and power generation.