The impact of coal-to-oil on the petrochemical industry
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In recent years, as production technologies have become more mature and **policies have been relaxed, more and more large-scale coal-to-oil projects have been approved for implementation. Meanwhile, the gradual decline in oil prices has placed increasing pressure on the domestic refining industry; as a result, dehydration processes have largely come to an end, and the boom in hydrogenation activities is fading away. Where will the petrochemical industry as a whole be heading in the future? Let’s hear everyone’s opinions.
Currently, the development of entire energy industries such as coal chemical and petrochemical sectors is in a phase of industrial adjustment and optimization. Only those industries that pursue an advanced technological approach, focus on energy conservation and emission reduction, and are environmentally friendly can thrive. Only those with mature technologies and a well-structured industrial chain with supporting upstream and downstream industries have the potential to survive and develop. The era when things flourished everywhere is gone forever!
Coal-to-oil is a complement to the refining industry, while providing the chemical industry with more diverse and broader options for raw materials!
We welcome those in the industry to engage in more communication and exchanges in order to predict how the situation will develop going forward.
However, industry experts believe that coal-to-oil production and domestic refining should be considered separately, as each has its own advantages. Coal-to-oil production suffers from limited support, which limits its development; yet, judging from the profitability of companies such as Yitai, it still holds considerable potential.
The cost of producing oil from coal is very high, and it is not profitable in an era of low oil prices. With the increasing use of electric vehicles and cleaner energy sources, an era of high oil prices may never return again; thus, the industry of producing oil from coal is in a precarious situation with an uncertain future.
There is some truth to that; I hope Russia can make a difference in the Middle East.
As falling crude oil prices have led to lower prices for refined fuels, domestic fuel consumption taxes remain high, leaving no profit margin for coal-to-oil production. Shenhua’s Ordos coal liquefaction project incurred huge losses this year. As for Yitai and Lu’an’s coal-to-oil projects, although details are not available, it is estimated that they also suffered significant losses. An assessment was made at last year’s coal-to-oil economic work conference: coal-to-oil is not profitable when crude oil prices are below $70.
Last year, Itai’s financial reports showed profits, but it’s hard to say what will happen in the future.
In 2014, Yitai’s coal-to-oil project generated a profit of over 100 million yuan from its 160,000-ton production capacity; however, in the first half of 2015, Yitai’s financial reports showed that this project only yielded a profit of slightly over 2 million yuan.
This post was last edited by xuyuan0206 on 2015-10-16 at 14:13. In fact, I believe that given the current economic situation and energy landscape, whether it’s coal-to-oil conversion or oil refining, these methods will ultimately be replaced by new energy sources. One of the few options is to carry out further processing of the products to produce chemical products.