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China coal giants run over 100% CTO capacity in H1

China’s coal giants Shenhua Group and China Coal Energy Co., Ltd. operated their coal-to-olefin projects at over 100% capacity in the first half of the year, despite falling oil prices, showed the half-year reports released late August.

Capacity utilization of Shenhua’s 60,000-million-tonne coal-to-olefin project at Baotou, Inner Mongolia reached 107% on average over January-June, the company said in its half-year report on August 22.

The group produced 161,200 tonnes of polyethylene (PE) and 160,000 tonnes of polypropylene (PP) during the same period, up 10.6% and 7.5% year on year, respectively.

However, operating revenue and profit of the project amounted to 2.97 billion yuan ($463.9 million) and 561 million yuan, down 13.4% and 42.6% on year, mainly due to an over 1,000 yuan drop in PE and PP sales prices.

Meanwhile, China Coal Energy posted average capacity utilization of 115% in its 600,000-million-tonne CTO project in Yulin, Shaanxi province.

It produced 178,000 tonnes of PE and 168,000 tonnes of PP between January and June, while operating revenue and net profit totaled 2.87 billion and 529 million yuan, respectively.

In a time of overcapacity and low prices, CTO project has showed strategic value for coal companies, and is expected to see increased profitability as oil prices rebound in the future.

source: http://en.sxcoal.com