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                              Rising naphtha olefins consider switching to coal
                              TIME2016-06-17 16:40:00

                              Qi Min, Director of ICIS China said that although China has 70% of the oil produced from naphtha, but due to high prices of naphtha to olefins in Asia, naphtha olefins plant is shut down or switched to coal. TZMI China Senior Project Manager Chen Ying said, adding that the maximum cost of ethylene-based naphtha. On the other hand, the demand for natural gas-based ethylene is growing, and demand is slightly larger than the supply. She said, "natural gas-based ethylene significant cost advantage is the main driver of growth in demand."

                              In October 22 - FlexPO meeting held on 24 May in Shanghai, professionals gather to discuss a development trend of China's polyolefin. Qi Min added that the macroeconomic environment unfavorable demand for PP and PE. She said that in the past, the demand growth rate is generally 15-20%, but now has fallen below 20%. "It is a great challenge." She added that China imports nearly half of the PE and PP one-third will come from the Middle East.

                              As for domestic production, the capacity for rapid growth, and more and more advanced, investors began to diversify. China has been put into the coal to olefins project, mostly in the northern and western regions. She said that was only Sinopec and PetroChina, but now "Taiwan's foreign and private and large coal and power companies are also entering the industry."

                              Gregory Ping suggested that the supply of polyolefins in the coming years will increase significantly. In the coal to olefins plant, most of the ethylene and propylene products will be processed into PE and PP. Therefore, the development of coal-to-olefins industry will greatly accelerate the increase in China's supply of polyolefins. "She added that the future structure of raw materials will dramatically change the future years, 80% of the new PE capacity and 64% of the new PP production capacity from coal-to-olefins project.

                              She said that in recent years Chinese polyolefin market has changed from "overall shortage" as "structural oversupply and structural shortage." She added that for a long time, China's production of polyolefins manufacturer chooses the general level of poly olefins, most meet the market demand. But she believes that with overcapacity, Chinese companies began to pay more attention to advanced and specialty products, in order to compete with foreign enterprises.

                              China's pollution problems also had an impact on the olefin industry. Chen Ying said that the cost advantage of coal to olefins is facing challenges because of contamination concerns and the high cost. "She added that the pollution tax topic has been heard, which may limit production of coal to olefins .ICIS Yu Ting said, because the coal-to-olefin will produce pollution, so practitioners enterprises should pay more attention to environmental issues . "we should find a solution. "

                              China National Chemical Information Center senior consultant Gregory level at the meeting talked about China's polyolefin demand growth, particularly PP and PE. She said that since 2002, Chinese imports of PP demand and production requirements of naphtha to olefins and steadily rising consumption.


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