That would more than double annual capacity to 19.5 billion cubic metres (bcm), equal to roughly a fifth of China’s LNG imports last year.
The sector last year turned 276 million tons of coal - equivalent to almost a year of European coal use - into chemicals, oil and gas, according to the China National Petroleum and Chemical Planning Institute. If all planned projects proceed, the industry would roughly double over the next five years…
China and South Africa are the only countries operating CTL and CTC at an industrial scale…China has effectively replaced gas as its main feedstock for ammonia and methanol production with raw coal, to the extent that roughly 80% of these chemicals’ output is now fed by coal.
Largely unnoticed, the size of this obscure corner of the Chinese coal industry has reached gargantuan proportions: It consumes about 380 million metric tons of coal as a feedstock for chemical and liquid fuel production, according to the International Energy Agency.
To understand its size better, it helps to think about the segment as if it were a country. As such, it would rank as the world’s third-largest consumer, only behind the rest of the Chinese coal sector and India, but ahead of the US, Japan and other top coal-consuming nations like Indonesia and Turkey.
They tell us China has become a leading producer of petrochemicals. Ie ethylene and products like polyethylene. The result is oversupply causing ethylene crackers in Europe and Asia (Japan, S Korea) to shut down.
Methanol from coal is well known. Eastman Chemicals has plant in Kingsport, TN. Methanol to acetic acid, acetic anhydride, etc to cellulose acetate (tricot fiber and acetate safety film) and other acetates.
China mostly imports oil (via Straits of Hormuz), but coal is abundant. Germans made petroleum from coal in WWII but process was inefficient. China has apparently perfected methanol homologation extending carbon chain to ethanol which cracks to ethylene.
Google reports most ethylene in China still comes from naphtha cracking but coal to ethylene is growing and is probably more profitable due to abundant coal.
The U.S. is probably safe from competition in petrochemicals due to abundant natural gas. But those who import oil for crackers are at risk. Ethane from “wet” natural gas can also be cracked to ethylene. China had been importing ethane from the U.S. but Google says that has been stopped.
We know that China selects some industries to dominate. Rare earths, lithium, and solar panels are examples. Petrochemicals seem to be on their list. They are probably major users in their extensive manufacturing operations. So this looks like vertical integration on a massive scale.
Dow Chemical is getting a nice run as benefitting from Straits of Hormus problem. Short term maybe, largest US chemical company. Well managed. Not a growth company. I dont think lack of investment is a problem.
Yes that is Dow Chemical, but not many of the others.
Dow Chemical has heavily invested in U.S. factory expansion over the past decade, driven by low-cost shale gas, marking a significant shift from previous decades where they scaled back domestic operations. While Dow maintains a large global footprint, with manufacturing sites in 29 countries, its recent strategic focus has heavily favored reinvestment in its U.S. Gulf Coast facilities