Xinjiang is expected to become a new highland for the development of the coal-to-olefin industry
Source: Coal Chemical Customers 
83,207 
April 11, 2024, 4:19 PM
According to the statistics of Meikai Krypton Coal Chemical Industry Research Institute, the coal-to-olefin projects currently put into production and planned in Xinjiang are: 680000 tons / year coal-to-olefin project of Guoneng Xinjiang Chemical Co., Ltd.; 800000 tons / year coal-to-olefin project of Xinjiang Shanneng Chemical Co., Ltd.; 800000 tons / year coal-to-olefin project of Xinjiang Dongming plastic Co., Ltd. Xinjiang Zhongxin Coal Industry Co., Ltd. Coal-based chemical industry coupling green hydrogen clean energy demonstration project-1.5 million tons / year coal-to-olefin project; Shaanxi Investment Group Co., Ltd. Zhendong coal-to-olefin project; Henan Energy Group Xinjiang Company Zhundong Coal-to-Olefin Project, etc.
Xinjiang is the province with the largest land area in China, which is extremely rich in natural resources, but the speed of development in the past years has not been satisfactory. From 2014 to 2022, the compound growth rate of GDP in Xinjiang Province was 8.5%, which was basically the same as the national level of 8.2%. However, with the stable governance environment and the promotion of China's Belt and Road Initiative and the western development strategy, Xinjiang began to enter a period of rapid development. According to the 14th five-year Development Plan of Xinjiang Autonomous region, eight major industrial clusters will be built, of which the top two are oil and gas production and processing industry clusters and coal, coal, power and coal chemical industry clusters. We believe that under the new situation, the development of coal chemical industry in Xinjiang, especially coal-to-olefins, is of great value in both strategic and economic aspects. Xinjiang is expected to rise as a new base for coal-to-olefins.
Xinjiang is the main area to increase coal production in China in the future, but how to absorb the increase is a very important issue. At present, the development of coal chemical industry is a more reasonable choice. Among the various paths of modern coal chemical industry, from historical experience, we think that coal to olefin is one of the most vital paths. It can be said that the vigorous development of coal-to-olefin in Xinjiang is the result of a two-way trip.
As China is rich in coal, less gas and less oil, coal chemical industry has always been an industry that China hopes to develop vigorously. The methanol-to-olefin production of Shenhua Baotou was put into production in 2010, which for the first time ran through the production process of coal-to-olefin and opened a chapter in the development of China's new coal chemical industry. Subsequently, China has successively realized the industrial production of coal-to-gas, coal-to-oil, coal-to-ethylene glycol and other routes, which has made a significant contribution to China's supply security. However, if a process route can be developed for a long time, it still needs economic support. we believe that coal-to-olefin is one of the most vital routes in the new coal chemical industry.
Although coal-to-olefin develops rapidly in China, it is actually a supplementary route for petrochemical industry, and the prices of polyethylene and polypropylene are still mainly affected by petrochemical routes. In terms of oil and coal prices on the feedstock side, oil is at the central level of the past decade, while coal is at a high level. Due to the expansion of olefin production capacity in recent years, the price gap between polyethylene and crude oil has dropped to the bottom of the past decade, the cracking part of most refining and chemical enterprises has fallen into serious losses, and there is little room for further reduction. And even at the high price of coal, coal-to-olefin is still profitable.
The biggest advantage of coal-to-olefin development in Xinjiang is the low cost of raw materials and energy, in the final analysis, the low price of coal. We believe that its profit model is similar to that of ethane cracking in the United States, which is due to the difficulty of outward transportation of raw materials, resulting in extremely low local prices. If it can be converted into a product form with lower unit freight on the spot, it will have a great competitive advantage. Ethane cracking in the United States converts ethane gas into solid liquid products such as polyethylene and ethylene glycol to facilitate export. Xinjiang coal-to-olefin is to reduce the proportion of transportation costs by compressing the quality of coal and increasing the value per unit of goods. Therefore, the greater the proportion of coal in quality compression, the greater the cost advantage. The comparison between coal-to-olefin and chlor-alkali chemical industry in Xinjiang shows that the coal consumption per ton of coal-to-olefin is obviously higher than that of chlor-alkali chemical industry. Moreover, with the adjustment of energy structure in the past two years, the price of coal in the central and eastern regions has increased significantly, and the price gap between Xinjiang and Xinjiang has widened, which further expands the advantage of coal-to-olefin in Xinjiang. Source: coal chemist
Xinjiang is the province with the largest land area in China, which is extremely rich in natural resources, but the speed of development in the past years has not been satisfactory. From 2014 to 2022, the compound growth rate of GDP in Xinjiang Province was 8.5%, which was basically the same as the national level of 8.2%. However, with the stable governance environment and the promotion of China's Belt and Road Initiative and the western development strategy, Xinjiang began to enter a period of rapid development. According to the 14th five-year Development Plan of Xinjiang Autonomous region, eight major industrial clusters will be built, of which the top two are oil and gas production and processing industry clusters and coal, coal, power and coal chemical industry clusters. We believe that under the new situation, the development of coal chemical industry in Xinjiang, especially coal-to-olefins, is of great value in both strategic and economic aspects. Xinjiang is expected to rise as a new base for coal-to-olefins.
Xinjiang is the main area to increase coal production in China in the future, but how to absorb the increase is a very important issue. At present, the development of coal chemical industry is a more reasonable choice. Among the various paths of modern coal chemical industry, from historical experience, we think that coal to olefin is one of the most vital paths. It can be said that the vigorous development of coal-to-olefin in Xinjiang is the result of a two-way trip.
As China is rich in coal, less gas and less oil, coal chemical industry has always been an industry that China hopes to develop vigorously. The methanol-to-olefin production of Shenhua Baotou was put into production in 2010, which for the first time ran through the production process of coal-to-olefin and opened a chapter in the development of China's new coal chemical industry. Subsequently, China has successively realized the industrial production of coal-to-gas, coal-to-oil, coal-to-ethylene glycol and other routes, which has made a significant contribution to China's supply security. However, if a process route can be developed for a long time, it still needs economic support. we believe that coal-to-olefin is one of the most vital routes in the new coal chemical industry.
Although coal-to-olefin develops rapidly in China, it is actually a supplementary route for petrochemical industry, and the prices of polyethylene and polypropylene are still mainly affected by petrochemical routes. In terms of oil and coal prices on the feedstock side, oil is at the central level of the past decade, while coal is at a high level. Due to the expansion of olefin production capacity in recent years, the price gap between polyethylene and crude oil has dropped to the bottom of the past decade, the cracking part of most refining and chemical enterprises has fallen into serious losses, and there is little room for further reduction. And even at the high price of coal, coal-to-olefin is still profitable.
The biggest advantage of coal-to-olefin development in Xinjiang is the low cost of raw materials and energy, in the final analysis, the low price of coal. We believe that its profit model is similar to that of ethane cracking in the United States, which is due to the difficulty of outward transportation of raw materials, resulting in extremely low local prices. If it can be converted into a product form with lower unit freight on the spot, it will have a great competitive advantage. Ethane cracking in the United States converts ethane gas into solid liquid products such as polyethylene and ethylene glycol to facilitate export. Xinjiang coal-to-olefin is to reduce the proportion of transportation costs by compressing the quality of coal and increasing the value per unit of goods. Therefore, the greater the proportion of coal in quality compression, the greater the cost advantage. The comparison between coal-to-olefin and chlor-alkali chemical industry in Xinjiang shows that the coal consumption per ton of coal-to-olefin is obviously higher than that of chlor-alkali chemical industry. Moreover, with the adjustment of energy structure in the past two years, the price of coal in the central and eastern regions has increased significantly, and the price gap between Xinjiang and Xinjiang has widened, which further expands the advantage of coal-to-olefin in Xinjiang. Source: coal chemist