Low oil prices lead to delays in the commissioning of multiple coal tar hydrogenation units

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Low oil prices have led to the postponement of the commissioning of several coal tar hydrogenation units. Source: China Nitrogen Fertilizer and Methanol Technology Network. It is understood that at least 5 new coal-to-oil plants using coal tar or anthracene oil for hydrogenation will begin operations and start producing products in November 2015, including those operated by Handan Xinsong, Hebei Kaidenis, Shandong Baota, and Shandong Rongxin. Meanwhile, Henan Liyuan Chemical’s high-temperature coal tar hydrogenation unit had already been put into operation at the beginning of the third quarter. 　　Analyst Zhang Yonghao said that due to the impact of the refining and chemical industry, some production facilities were built earlier on, but their commissioning has been continuously delayed. Taking Kaidenis Hebei Chemical Technology’s 100,000 tons per year anthracene oil hydrogenation facility as an example, its original plan was to start operating in July 2015. Plant projects such as Shandong Baota and Shandong Rongxin also experienced delays at different times. 　　Low raw material prices have, to a certain extent, created the conditions for the large-scale deployment of such devices. During this peak period of commissioning, the facilities are mostly located in Shandong and North China; many manufacturers of new coal-to-oil plants are rushing to put them into operation before winter arrives, in order to avoid the increased difficulties associated with operations in cold weather. If this stage is missed, the commissioning date of the facility will be forced to be postponed further. 　　New coal-to-oil projects are a product of the era of high oil prices, and are seen as a new force for extending the coal chemical industry chain and revitalizing the coal utilization sector. Since the second half of 2013, these projects have shown considerable activity, with many being established in various locations. Due to financial and policy constraints, private enterprises tend to focus on projects involving the hydrogenation of coal tar or anthracene oil. 　　However, during the period of intensive development of new coal-to-oil projects, due to technical and process limitations as well as market factors, the operation of some of these projects did not go smoothly; there were numerous cases of projects failing to start up or having their start dates significantly delayed. The turmoil in the commodities market caused by the economic downturn in 2014 and the sharp drop in international crude oil prices had a significant impact on the domestic markets for refined petroleum products and chemical goods. This has severely affected the progress of new coal-to-oil projects. Some projects such as Shandong Tiejiong Energy and Xuzhou Weitian Chemical have been forced to be put on hold, while the capital-intensive Shandong Goodde 500,000 tons per year aniline oil hydrogenation project has remained unfinished since its completion in 2013. 　　Zhang Yonghao said that a new wave of production expansions is coming, but for companies, the challenges have only just begun. In the current sluggish refining environment, the prospects for new coal-to-oil projects are uncertain; expected profits are set to decline significantly, and they must contend with even fiercer market competition. New coal-to-oil projects currently in operation, such as Shenmu Tianyuan, have made technology dissemination one of their revenue-generating activities. Anyang Baoshun, a new enterprise in the field of anthracene oil hydrogenation, decided at its company product quality and technology seminar in 2015 to integrate anthracene oil hydrogenation process packages for the purpose of technology transfer, in order to create new sources of profit growth. For new coal-to-oil projects, it is particularly important to determine the appropriate market positioning for their products; by identifying the demand for each type of product, the most suitable downstream sales channels can be identified, thereby helping to avoid more risks in a challenging business environment.