Coal-to-olefins technology in China could soon flood global Polyethylene markets

20-Jan-16

If China’s development of coal-to-olefins (CTO) technology continues as planned across the next five years, the global polyethylene (PE) market is likely to be saturated with material through 2019, according to the just-released quarterly: “Tauber Rosenberg Polyethylene Report.” Polyethylene consumes more than half of the world’s supply of ethylene, derived from various petrochemical olefins. At Tauber Rosenberg, we are tracking more than three dozen coal-to-olefins and methanol-to-olefins projects in China, all of which are likely to come on stream by 2020,” said Jim Changle editorial director of petrochemical analysis. “Those new plants are expected to add more than 10 million metric tons of ethylene to the Chinese market.” The report showed that the amount of ethylene produced from coal-to-olefins in China is expected to match the amount of ethylene produced from new steam cracker projects tied to shale gas developments in North America. “We hear a lot of talk about how shale gas is a ‘game changer’ in the petrochemical industry,” Changle said. “And it certainly is. But coal-to-olefins has the potential to have an even greater impact than shale gas, if China moves forward as planned.” Report data showed that not only is China adding ethylene production capacity, it is adding more than 14 million metric tons of additional polyethylene capacity between 2015 and 2021, much of which is being fed by the coal-to-olefins-produced ethylene.