The optimization project for the downstream processing routes of Yulin coal chemical products has been re-registered, with additional production capacity for UHMWPE and POE added

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Recently, the downstream processing route optimization project of Shaanxi Yanchang Petroleum Yulin Coal Chemical Co., Ltd. (hereinafter referred to as “Yulin Coal Chemical”) was re-approved, officially marking the abandonment of plans to build facilities for producing 200,000 tons per year of EVA (ethylene-vinyl acetate copolymer) and 200,000 tons per year of vinyl acetate. Instead, the company will focus on developing projects for producing 30,000 tons per year of ultra-high molecular weight polyethylene, 50,000 tons per year of α-olefins, 50,000 tons per year of vinyl oil, and 100,000 tons per year of polyolefin elastomers (POE). This project adjustment is guided by the principles of \"retaining the core, eliminating redundancy, and focusing on high-end products.\" While maintaining the 300,000 tons per year vinyl acetate complex intact, it aims to carry out a structural restructuring of the downstream product portfolio. The 300,000 tons per year vinyl acetate plant, serving as a carrier for the supply of core raw materials, can directly provide vinyl acetate for the production of new products such as POE and vinyl oils, thereby creating an internal material circulation system of “vinyl acetate – high-end polyolefins”. The key indicators are as follows: Capacity cancellation – 200,000 tons per year capacity for ethyl acetate plants and 200,000 tons per year capacity for EVA plants, in order to avoid the risk of overcapacity in the mid-to-low end market and reduce pressure from homogeneous competition ； New production capacity: 30,000 tons per year of ultra-high molecular weight polyethylene, 50,000 tons per year of α-olefins, 50,000 tons per year of vinyl oil, and 100,000 tons per year of POE. In total, the new capacity for high-end polyolefins and related raw materials amounts to 230,000 tons per year ； Core supporting facilities: Public utilities, auxiliary production facilities, and infrastructure in the area in front of the factory will be developed simultaneously. The workforce will increase by 750 people, with a four-shift, three-shift operation system in place, allowing for 333 days of work per year (8,000 hours). The total investment amounts to 9.86 billion yuan, of which 275 million yuan is allocated to environmental protection measures; thus, environmental protection accounts for 2.79% of the total investment, ensuring both capacity expansion and compliance with environmental standards. This major adjustment is not merely a simple replacement of production capacity; rather, it represents a strategic move by the company to shift toward the high-end polyolefin sector, driven by changes in market demand, advantages in raw material availability, and the competitive landscape of the industry. By building a closed-loop industrial chain that connects raw materials to high-end materials, the company aims to set a benchmark for the upgrading of the coal chemical industry in northern Shaanxi. Market demand evolution: Avoid excess in the mid-to-low-end segment and seize opportunities in the high-end market. In recent years, domestic EVA production capacity has seen explosive growth; between 2023 and 2024, new capacity added amounted to over 1.5 million tons per year. Of this, photovoltaic-grade EVA accounted for 60% of the total capacity, while there was a significant surplus of low-end, general-purpose EVA, leading to continuous declines in prices ； High-end polyolefin products such as ultra-high molecular weight polyethylene and POE have long faced a situation of strong demand and insufficient supply. Support from raw material endowments: Building a closed-loop industrial chain based on existing production capacity. The olefinic products produced by Yulin Coal Chemical’s 150,000 tons per year syngas-to-oil facility can be used as raw materials for ultra-high molecular weight polyethylene and POE. This creates a complete industrial chain of “methanol-acetic acid-vinyl acetate-high-end polyolefins”, reducing raw material costs by 18%-22%. Need for strategic transformation: Focus on the advancement of the coal chemical industry. By focusing on high-end products such as ultra-high molecular weight polyethylene and POE, Yulin Coal Chemical can break away from the traditional \"coal-methanol-acetic acid\" pathway, expand into the field of high-end materials, gain a competitive advantage through differentiation, and provide a replicable model for the transformation of the regional coal chemical industry. Over 6 million tons – domestic POE production capacity is set to surge; capacity of domestic ultra-high molecular weight polyethylene plants is being unleashed