Since May 2012, coal prices have fallen by nearly 20%. The cost burden on coal chemical companies has been significantly reduced. The profits of coal-to-olefins and other new coal chemical projects have generally increased, and some projects are being prepared for expansion. This is the news that the reporter interviewed on May 3 for major coal chemical companies.

According to Wang Ying, deputy general manager of Shaanxi Xinghua Co., Ltd., coal costs account for about 65% of the total cost of coal chemical products. Coal prices have fallen by more than 18% since May last year, and chemical coal is no longer in strain.

The decline in coal prices has led to a general reduction in raw material costs for tons of products from projects such as Shenhua Ordos coal-to-oil, Shenhua Baotou coal-to-olefins, Shenhua Ning coal-based polypropylene, Shanxi Panan coal indirect oil production, and Inner Mongolia Itai Feituo synthetic oil. 400~800 yuan. As the prices of olefins and oil products are relatively firm, the profitability of these projects has been significantly enhanced, and related companies have achieved good results.

Coal clean fuel also benefits a lot. Yang Zhanxi, general manager of Shenmu Oil-rich Energy Technology Co., Ltd. of Shaanxi Coal Chemical Group, said that due to the successful capture of the world-wide problem of hydrogenation of medium/low-temperature coal tar full fractions, combined with the decline in coal prices, an annual output of 120,000 tons of medium/low temperature coal tar full-distillate Hydrogenation to produce clean fuel oil industrialization demonstration projects is expected to achieve the best profit in history.

The drop in coal prices will also activate coal chemical projects that have stagnated production and reduced production. Wang Yaxiong, Dean of the School of Chemical Engineering at Inner Mongolia University of Science and Technology, said: “The drop in coal prices has greatly increased the economic efficiency and feasibility of new-type coal chemical projects. This is an opportunity for the new coal chemical projects that are acquiring 'roads', and some companies actively expand and prepare for them. Construction of coal-to-petroleum, coal-to-olefin, coal-to-ethylene glycol, coal-to-natural gas projects, etc.” Shi Lei, chairman of Inner Mongolia Duomende Metallurgical Chemical Co., Ltd., said coal chemical projects, partly due to high coal prices and production cuts or postponed production, It is now also possible to consider putting into production or resuming production.

However, the decline in coal prices did not please all coal chemical companies. At the same time as the price of coal fell, the price center of chemical products moved down as a whole. For example, the ex-factory price of methanol fell from 2,550 yuan per ton to 2,250 yuan today, and the market price of liquid ammonia dropped more than 19% year-on-year. Coupled with the increase in labor costs, transportation costs, and financial costs, the overall cost of the company has not dropped significantly, and most of the traditional coal chemical companies are still operating at low profit or loss.

Shen Xidi, executive deputy general manager of Shaanxi Coal Chemical Group, said that with the fluctuation of coal prices in the later period, the cost of coal chemical companies still has room to fall. However, there is a certain correlation between coal and chemical product prices. Due to the increase in mining costs, the possibility that coal prices will continue to fall in the deep future will not be significant. Under such circumstances, chemical companies can only maximize their internal management, strive to reduce costs, and develop and mass produce new, high-value-added coal chemical products.

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