Coal-based ethylene glycol will be shuffled in the next five years

In the recent period, the continuous decline in the price of crude oil has had a very big impact on the entire coal-based glycol industry. Due to the favorable factors of falling oil prices, the cost of traditional naphtha to ethylene glycol processing has been constantly decreasing, and the profitability of some ethylene glycol manufacturers has been improved.

During the first half of December of last year, crude oil prices in the international market fluctuated between US$60.94/bbl and US$66.80/bbl, and the US crude oil slumped to its lowest level since 2009, and even approached 60 per barrel. Dollars.

The apparent drop in the energy price of upstream energy makes it seem that traditional naphtha to ethylene glycol production companies have seen great hopes, and let the traditional naphtha ethylene glycol production enterprises achieve a profit of 1,000 yuan/ton in early December. At a level of 1,200 yuan per ton, while methanol and coal glycols are still profitable, they have no profit advantage over naphtha ethylene glycol.

As we all know, because coal-to-ethylene glycol can not be fully used in the downstream polyester industry chain, because some of the state-owned large-scale polyester companies and private or joint ventures are purchasing 10% to 20% of coal to ethylene glycol Compared with naphtha ethylene glycol, the advantages of coal-based ethylene glycol and conventional olefin-based ethylene glycol are only in terms of cost, while the continuous decline in international oil prices and a slight rebound in coal prices give coal to China. The ethylene glycol industry has brought a very big impact, and the sales pressure of domestic coal-to-ethylene glycol production companies will also increase.

It was predicted that from 2013 to 2015, with the gradual maturity of coal-to-glycol technology, companies will be more inclined to this route. This kind of production process is in line with the characteristics of China's lack of oil, low gas, rich coal resources, and relative oil. The cost advantage of the route method is obvious. The processing cost per ton is about 500 yuan/ton to 1,000 yuan/ton, and it has the advantages of short process flow, low energy consumption, low water consumption, low emission, and good profitability. However, it did not happen that crude oil prices fell to the lowest point in five years. This made the coal-to-ethylene glycol producers somewhat unprepared.

According to calculations, only when the price of oil is at the level of US$75/barrel or even higher, China’s coal-based glycol has a competitive advantage. Today, the drop in oil price is very large, and it can be said that there is no advantage at all. Downstream polyester PET manufacturers will no longer want to achieve the fundamental goal of “cost reduction and efficiency increase” through the use of coal-based glycol raw materials.

At present, domestically produced ethylene glycol mainly uses the oil route, and the product cost is closely linked with the international oil price. The market sales price will also follow the change in crude oil price and oscillate. The cost of upstream raw materials accounts for approximately 50% of the total cost of ethylene glycol. The ethylene glycol products in the Middle East use ethane and propane in the associated gas of oil fields as raw materials, which are inexpensive and even free to use. Therefore, the average price of glycol-to-shore glycol is always RMB 400/tonne to RMB 800/ton lower than that of China. The cost advantage of processing and producing ethylene glycol in the Middle East is very obvious. In recent years, under the influence of the shortage of petroleum resources, high oil prices, high costs, the impact of low-priced products in the Middle East, and high water consumption on the Chinese ethylene glycol market, the traditional Chinese petroleum-based ethylene glycol system lacks competitiveness. In previous years, many people had also expressed interest in corn-based bio-chemical process routes using ethanol-ethylene-ethylene glycol. Once there was a heated discussion on this topic and support and opposition voices. There are, but in the end, all kinds of restrictions make this process impossible. When the price of oil is high, it can be said that coal-based ethylene glycol is an inevitable trend.

From 2015 to 2020, if China still has investors who want to put on coal to make ethylene glycol projects, it must put investment risks first. The very serious problems are now facing everyone. If China's coal-to-ethylene glycol project is once again bent on building alone, and then the effective production capacity will continue to expand rapidly, the brutal competition between coal-to-ethylene glycol producers will be ahead of schedule. Pulling it off, even some projects that are just starting to drive will encounter the "winter" market, and may even suffer from a situation of forced production cuts or even production cuts.