China’s coal-to-chemicals sector emerging in 2011 to impact petrochemical and energy markets

04-Jan-11

Planners in the Chinese Government intend to shift their intention from "growth at any cost" model to a more high-value driven economy. The surprise in 2011 could be the silently emerging sector of coal-to-chemicals, impacting the petrochemical and energy commodity graphs in the long run. China needs to import one-third of its crude requirement, and shifting to coal in the petrochemical sector is a much needed alternative. The rising price of crude oil has rendered coal a favourite alternative to polyolefins, which is in short supply in China. The latest developments in China have seen the production of coal-to-liquids, coal-to-dimethyl ether, coal-to-olefins and coal to SNG in 2010. The Chinese coal chemical industry is backed by intense government interest, with new generation technology from Western multinationals. Three companies-Total Petrochemicals, Celanese, and Dow Chemical - are advancing their cutting edge technology in coal chemicals to China, lured by the country's ample supply of coal. China's major coal-based chemical projects started trial operations in August 2010, spearheaded by the Shenhua Group. Methanol was fed at coal giant Shenhua Baotou's 600,000 tpa methanol-to-olefins plant in Inner Mongolia. The unit can produce 300,000 tpa each of ethylene and propylene. The Datong Coal Mine Group plans to target new energy-petrochemical development with a 450,000 tpa methanol-to-propylene and PP project.