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

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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?"

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  • Document

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

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Table of contents

Tables and charts

This report includes 10 images and tables including:

Images

  • 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
  • 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

Tables

  • Will China continue to invest in coal- and methanol-to-olefins?: Table 1

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