AFPM ’18: China switching back to naphtha from coal as petchem feed

26 March 2018 00:10 Source:ICIS News

SAN ANTONIO (ICIS)--China has been in the process of switching back to naphtha-based petrochemical capacity from coal, which has lost its low-cost advantage in recent years, and amid the government's intensifying antipollution campaign, a market specialist said on Sunday.

Seven new petrochemical complexes in the country are concentrated in the eastern coast, all of which are naphtha-based, said ICIS Asia business development director David Hanna in a presentation during ICIS' Networking Discussion at the sidelines of the International Petrochemical Conference (IPC).

He said that in 2013, the Chinese government promoted CTO (coal to olefins) and CTM (coal to methanol) to leverage coal abundance low-cost advantage, noted that “naphtha cracking now more economical than CTO”.

Coal is the most polluting fossil fuel. With the government’s embrace of a more environment-friendly approach to manufacturing, China has been requiring its industries to use gas for power generation instead of coal, also hitting coal-to-chemical production.

"Pollution has finally become a priority [for China]," said Hanna, adding that this is part of the country's economic "rebalancing for relatively low but sustainabel growth".

Hosted by the American Fuel & Petrochemical Manufacturers (AFPM), the IPC takes place on 25-27 March in San Antonio, Texas.

By Pearl Bantillo