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10 Pages

Will China continue to invest in coal- and methanol-to-olefins?


Will China continue to invest in coal- and methanol-to-olefins?

Report summary

Coal-to-olefins (CTO) was once regarded as the bright new hope of the olefins industry in China. However, recent low crude oil prices and resultant lower global olefins prices have impacted the economics of such projects very negatively, and CTO margins have been squeezed by over 50% in 2015, compared with 2014. This has cast a shadow of doubt on the viability of these highly capital-intensive investments. We compare the economics of coal- and methanol-based olefins with the traditional naphtha cracking route to olefins in Asia, and examine how their respective cost positions and ROI outlook have changed in the current low crude oil price environment.

In addition, we highlight the key policy details of China's 13th five-year-plan draft that will impact the coal-based olefins industry, and discuss how the evolving regulatory framework is expected to shape the future of this still-nascent industry.

Ultimately, we aim to answer the question "Will China continue to invest in CTO and MTO?"

What's included?

This report includes 1 file(s)

  • Will China continue to invest in coal- and methanol-to-olefins? PDF - 373.41 KB 10 Pages, 1 Tables, 9 Figures

Description

This Chemical Markets Insight report highlights the key issues surrounding this topic, and draws out the implications for those involved.

For participants, suppliers and advisors who want to look at the trends, risks and issues of this topic, this report gives you an alternative point of view to help inform your decision making.

With years of experience in the chemical markets industry, Wood Mackenzie is a trusted global leader with a reputation for producing consistently reliable information.

Our senior analysts are based in the markets they analyse. They use detailed research data to forecast, benchmark and recognise trends that will help both new and existing participants identify opportunities and avoid risks.

  • A review of the industry against the backdrop of low crude oil prices and an evolving regulatory framework
    • Existing coal- and methanol-to-olefins operations
    • What has happened to coal- and methanol-to-olefins economics since the crude oil price plunge?
    • Coal- and methanol-based olefins economics
      • Financing problems
    • Impact on CTO/P and MTO/P projects
    • Potential impact of evolving regulatory framework
      • Policy changes
        • 13th FYP (2016-2020) draft
      • Water consumption
      • Carbon taxes
      • Environmental issues
    • Will China continue to invest in coal- and methanol-based olefins projects?

In this report there are 10 tables or charts, including:

  • A review of the industry against the backdrop of low crude oil prices and an evolving regulatory framework
    • China coal- and methanol-based olefins capacity and operating rates
    • 2014 Asia ethylene plant gate cash cost
    • 2015 Asia ethylene plant gate cash cost
    • Typical cost composition of various olefins production routes
    • Will China continue to invest in coal- and methanol-to-olefins?: Table 1
    • Cash cost composition, 2014
    • Cash cost composition, 2015
    • Will China continue to invest in coal- and methanol-to-olefins?: Image 7
    • Status updates of firm/likely projects from H2 2014 view
    • Length of project delays from H2 2014 view
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