China Olefins Market E-News

In Aug. 2014, the fact that CDT followed other central enterprises such as China Guodian and CNOOC to withdraw from coal chemical industry aroused a hit in China. The coal chemical industry seems to involve in a big trouble. Is MTO also confronted with a turnaround? Though the debate on the central enterprises to shake off related businesses continues, the construction of Huainan Coal Chemical Base is progressed on schedule. How do the enterprises in the base achieve transformation and upgrading in such a gloomy coal market?

Meantime, traditional ethylene plants are still drawn back by high-price raw materials. However, Sinopec Qilu strives to seek for a way to optimize the structure of raw materials and lower production costs. The No.6 furnace of its olefins plant was reconstructed successfully in Aug. More notably, the reconstruction of Sinopec Qilu’s No.6 furnace is targeted to give play to ethane extracted in CNCCO Qingdao’s LNG terminal. This maybe a way for traditional ethylene plants to lower production costs.

However, taking ethane extracted from LNG as raw material presents some limitations, as the LNG terminals located in China’s eastern part, the coastal areas cannot serve the olefins plants in central and western China. Comparatively, shale gas in progress may be a solution to solve the problem. Currently, shale gas exploited in Chongqing’s Fuling is applied in the chemical production of Sichuan Vinylon Works. Nevertheless, the exploration of shale gas in China is still at a preliminary stage. In the future, with more and more shale gas exploited, can it be used to produce olefins and related downstream derivatives?

Regarding the strategy to enrich raw materials for olefins, the PDH projects in eastern China go in advance. Three Chinese enterprises such as Zhejiang Satellite are expected to put their PDH projects into operation in H2 2014. Then China’s propylene capacity will be relieved in a large scale. However, will the market suffer from overcapacity? How do the PDH projects work?

The above hot topics in China olefins market will be explored and reported by CCM in detail in this journal, China Olefins Market E-News 1408. Please pay close attention.

The RMB/USD exchange rate in this issue is USD1.00=RMB6.1681 on 1 Aug., 2014, sourced from the People's Bank of China.
If you would like to cover any specific topics or investigate any covered subjects in more details, please contact us on +86-20- 3761 6606, or econtact@cnchemicals.com.