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China coal chemical industry faces oversupply risk

China’s coal chemical industry faced oversupply risk with an influx of investment into this sector, said Li Shousheng, president of the China Petroleum and Chemical Industry Federation (CPCIF) during a meeting on September 10.

More and more coal producers are turning to downstream industries of power and coal chemical amid a supply glut of the traditional fossil fuel.

China’s coal chemical products are mainly coal-to-methane, coal-to-olefin and coal-to-glycol, said Li, adding that homogeneity of these products are becoming serious. “If we don’t improve the differentiation and advancement of these products, they may be caught in vicious competition within the industry”, said Li.

A total 53 coal-to-olefin projects have been kicked off the preliminary work or been planned in China, with combined capacity totaling 33 million tonnes per annum, showed incomplete statistics from the CPCIF.

Besides, 7 coal-to-oil and 19 coal-to-glycol projects have been planned or under construction across the country, with annual capacity at 13.9 million and 4.7 million tonnes, respectively. 18 coal-to-gas projects were planned or under construction, with total annual capacity at 74 billion cubic meters.

The completion of all these projects would consume 429 million tonnes of coal, and the output of coal-to-olefin would far exceed domestic demand, said Li.

source: http://en.sxcoal.com