Domestic production capacity for coal-based ethylene glycol is increasing rapidly! With projects emerging everywhere, has there been a “result”?

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Domestic production capacity for coal-based ethylene glycol is increasing rapidly! With projects emerging everywhere, has there been a “result”? Author/Source: Date: 2016-07-04 Clicks: 7 The period from 2015 to 2016 can be regarded as a boom in the development of China’s ethylene glycol industry, with a series of new expansion projects being launched one after another. According to rough industry estimates, the coal-based ethylene glycol production projects that came online in 2015 included: Yongjin Chemical (Henan Coal Industry) with a capacity of 200,000 tons per year, Ordos Xinhang Energy with 300,000 tons per year, Yangmei Group Shenzhou Chemical with 220,000 tons per year, Xinjiang Tianye with an additional 50,000 tons per year, Tongliao Jinmei Chemical with an additional 70,000 tons per year, Jutai Energy with 100,000 tons per year, and Hualu Hengsheng with 50,000 tons per year – totaling approximately 1 million tons per year. http://img.yf116.cn/image/img/20160704/946323519293.jpg Just in June alone, as far as the author is aware, there are several projects that are currently in progress: On June 21, the 200,000 tons per year ethylene glycol production facility at Hubei Fertilizer Plant completed its commissioning and is set to go into operation soon. This project utilizes technology independently developed by Sinopec, and is at the international leading level. Additionally, the various units of Yangmei Group’s Shouyang Chemical 400,000-ton per year coal-to-ethylene glycol project (with 200,000 tons per year in the first phase) have entered the commissioning stage, with the plan to start feeding material into the gas processing section by the end of June. The 600,000 tons per year coal-based ethylene glycol production project (with an initial capacity of 200,000 tons per year) in the Delingha Industrial Park in Qinghai Province has been established there; the total investment in this project amounts to 3.33 billion yuan. …… Of course, there are also many companies planning coal-based ethylene glycol projects. It is reported that by 2020, China will have built a total of 41 coal-based ethylene glycol production facilities, with a combined capacity of 10.26 million tons. Coal-based ethylene glycol will become an important raw material source for China’s polyester fiber industry. So, what exactly is driving these companies to launch or plan to launch coal-based ethylene glycol projects? The author analyzes the reasons as follows: 1. The market gap remains large. China’s ethylene glycol market has always been highly dependent on imports, with this proportion remaining around 70% since 2005. Although the growth rate of imports has slowed down in recent years, the volume of imports remains substantial. According to statistics, China’s imports of ethylene glycol were 4 million tons in 2005, 6.65 million tons in 2010, and reached 8.77 million tons by 2015, with an average annual growth rate of around 8%. Currently, the annual demand for ethylene glycol in China is around 12 million tons, while the domestic production capacity is about 6 million tons. Due to a severe shortage in the supply of ethylene glycol along China’s traditional oil route and limited production growth, the ethylene glycol market is still far from being saturated, with the self-sufficiency rate remaining around 30% for a long time. 2. The oxalate hydrogenation route for producing ethylene glycol from coal (syngas) has advantages over petrochemical-based ethylene glycol. To date, a total of 10 technical consortia at home and abroad have developed complete sets of technologies. The research and development of coal-to-ethylene glycol production via the oxalate route is moving in the direction of lower costs, higher selectivity, longer catalyst life, and environmental friendliness. At the same time, thanks to the continuous improvement in product quality and a deeper understanding by end-users of the applications of coal-based ethylene glycol, it has begun to be widely used in the polyester fiber industry. 3. New types of coal-based chemical industries, including those for producing ethylene glycol from coal, were encouraged for development in the State Council’s \"Plan for the Adjustment and Revitalization of the Petrochemical Industry\" in 2009, as well as in the **National Development and Reform Commission’s \"Catalogue of Industrial Structure Adjustments (2011 Edition)\」 in 2011; as a result, such projects spread throughout the country. According to the \"Catalogue of Approved Investment Projects (2013 Edition)\」 issued by the State Council in December 2013, the production of ethylene glycol from coal was not included among the projects that required approval, which meant that registration with the provincial authorities was sufficient, thus accelerating the development of this industry. With the influx of a large number of investors and substantial investment in construction, has the spring for the development of coal-based ethylene glycol in China truly arrived? At present, although the production capacity of coal-based ethylene glycol in our country is growing rapidly, the high initial investment required for such facilities, along with substantial equipment depreciation costs, coupled with certain technical shortcomings, result in poor production stability, low operational rates, and thus a limited actual output. At the same time, with the sharp drop in international oil prices, the cost advantages of non-oil routes have virtually disappeared, and many newly built facilities have remained idle since their completion. In addition, coal-based ethylene glycol products have not yet been fully accepted by the downstream polyester industry due to differences in certain specifications compared to those produced from petroleum-based sources. Large polyester manufacturers generally purchase 10% to 20% coal-based ethylene glycol to mix with ethylene glycol derived from petroleum; only a few fiber factories in China use exclusively coal-based ethylene glycol. The final product of coal-based ethylene glycol cannot currently meet polyester-grade standards, which is why the downstream consumer market has not been able to develop yet. Therefore, overall, with coal-based ethylene glycol projects flourishing across the country, it remains difficult to achieve good results.