China’s coal-to-syngas investment to impact global EO prices - EO&D

25 April 2012 18:26  [Source: ICIS news]

JERSEY CITY, New Jersey (ICIS)--Buyers of ethylene oxide (EO) should monitor China’s development of coal-to-syngas investment, which is expected to significantly impact future global market fundamentals, a US-based ethylene derivatives producer said on Wednesday.

China plans to invest in several methanol-to-olefins plants with a minimum capacity of 500,000 tonnes/year by 2015. The olefins can then be used via traditional route to make ethylene and ethylene derivatives monoethylene glycol (MEG) and ethylene oxide, said Doug Richtler, president of US-based EO&D.

He spoke at the 2nd ICIS World Surfactants Conference in Jersey City, New Jersey.

China is the world’s largest consumer of ethylene glycol (EG), said Richtler. China is now focusing on increasing domestic supply of EO and EG.

“If these coal-to-MEG plans will not go through, this could mean real trouble for the rest of the EO market as China’s MEG needs will have to be supplied from conventional production. This will further tighten EO supply, driving up EO prices even higher,” said Richtler.

EO supply is currently tight as producers prefer to manufacture and sell EG over EO. It is hard for producers to transport EO because of its explosive properties, said Richtler.

“Hence, there are not many investments going on for purified EO production because of high logistical risks,” he added.

Most of EO in the US market is currently transported via rail. Only two companies transport EO in pipelines, he said.

Producers  also prefer to manufacture EG because of high growth demand coming from polyethylene terephthalate (PET) resins applications.

“Even here in the US, PET resins demand continues to grow because Americans just throw stuff away,” said Richtler. 

“The US remains the largest consumer of PET resins,” he added.

The surfactants conference ends on Thursday.

By: Doris de Guzman
+1 713 525 2653

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