Chinese policies will reduce competiton in energy-consuming industries

22 June 2012 14:49  [Source: ICIS news]

SINGAPORE (ICIS)--Energy and environmental policies in China will further reduce the competitiveness of industries which consume large amounts of energy, an executive said on Friday.

As stipulated in the nation's 12th five-year plan, by the end of 2015 China aims to reduce energy consumption per unit of GDP by 16%, and comprehensive utilisation of industrial solid waste will need to be increased by 72%, according to Han Jia, PVC department manager at Chinese chemical producer Tangshan Sanyou International Industry Company.

Han was speaking at the 16th World Chlor-alkali Conference held on 21-22 June, organised by ICIS and Tecnon OrbiChem.

China’s energy policies also include measures which will influence the coke and calcium carbide industry, he added.

“The government will suspend simple expansion of coke and calcium carbide projects and accelerate the elimination of [the] coke and calcium carbide industry,” said Han.

There are several conditions being used to assess the chlor-alkali industry in China, according to the policies.

“Initial plant capacity has to be 300,000 tonne/year [and] using [the] ionic membrane production process,” Han said. Other than that, plants have to be close to resources or have convenient logistic conditions.

In terms of building up a recycling economy, the production of cement could be made more efficient through the use of calcium carbide slag, he said.

Meanwhile, the five-year plan also includes several rules for the calcium carbide industry in China.

The expansion of production capacity at coke and calcium carbide plants is suspended.

In addition to the restrictions set in place by the energy and environmental policies, cheaper crude oil and natural gas may also undermine the competitiveness of Chinese-origin polyvinyl chloride (PVC), Han said.

In China more than 80% of PVC production capacity is carbide-based, with ethylene-based PVC capacity taking up the remaining portion, he said.

There were 98 PVC producers active in China in 2011. PVC producers with capacities of 100,000–200,000 tonne/year account for 31% of the market share, while PVC producers with capacities of 200,000–300,000 tonne/year make up 15%, Han said.

PVC producers with capacities less than 100,000 tonne/year and more than 300,000 tonne/year account for 26% and 28% respectively, he added.

PVC exports from China were at 368,000 tonnes in 2011, while imports were at 1.05m tonnes in the same period, according to Han.

Chinese PVC demand totalled 14.45m tonnes in 2011, with frames and pipes taking up the majority of downstream usage, at 25% and 16% respectively, he said.

By: Feliana Widjaja

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