Does coal chemical industry have a future?

China’s energy structure requires the cleaner use of coal; after looking at the policies regarding the development of the western region in the past couple of days, it seems that it is still necessary to keep control of energy supply in one’s own hands.

Once this policy is established, it should not be changed; it must be implemented consistently, regardless of external conditions. After all, energy security is a major strategy, and the energy structure cannot be altered. Therefore, the strategy related to coal-based chemical industries must remain unchanged

Currently, due to weak oil prices, the prices of coal chemical products such as polypropylene and polyethylene have dropped significantly. The coal chemical industry across the country is facing difficulties; the vast majority of companies are operating at a loss, and their prospects do not look good. Although the emergence of coal chemical industry was a result of energy structure adjustments, it has been operating at a loss, and collapse was only a matter of time. I believe that in another 5 years, with any further revolutionary advances in other low-cost extraction technologies or coal chemical processing methods, existing coal chemical companies will face great difficulties.

Personally, I think in some industries it’s necessary to **support certain companies; they don’t have to be very large, but they must possess the necessary technology, and they need to continue to develop!** It is when there is a real energy crisis that they come into play. At least external forces cannot sever our blood ties.

Developing coal chemical industry is related to energy strategy and energy structure issues; it’s not possible for it to continue losing money. Do you think CNPC and Sinopec will keep suffering losses?

It’s not that Senior Book Boy is pessimistic; businesses also need to survive. Economic rules are not something that should be protected just because one thinks it needs to be; therefore, at such times, it is necessary to employ higher-level adjustments at the ** level to give it due attention. It’s not necessary to cover all enterprises; it’s sufficient to ensure that there isn’t a large gap in technology. Take national defense for example; if **no more investment is made, the pressure from external forces will inevitably increase. So, should no investment be made? It’s necessary; it’s absolutely essential to keep him, because he is an **important foundation for support!

These enterprises need not only to be profitable but also to have **responsibility; with policy support, survival is not a major issue

The future of coal chemical industry has always been subject to debate. However, given China’s abundant coal resources and limited oil resources, it is likely that despite increasingly strict regulations, this industry will continue to exist. For example, in order to ensure **strategic oil and gas reserves, coal-to-oil technology and the companies involved in it will certainly be given some protection as a backup measure. In fact, the costs of many coal chemical enterprises are now lower than those of petrochemical enterprises. Well-managed coal chemical enterprises achieve good profits, and the currently extremely low prices of oil and gas are merely an exception that cannot persist in the long term. Therefore, as long as coal chemical enterprises have sound technology and management practices and can control their costs, it is possible for them to survive and even thrive.

I think there is a future in this; Hualu Hengsheng’s low costs represent another viable direction as well