Entry barriers to improve small and medium coal chemical companies or forced to withdraw

Today, it is not so easy to enter coal chemical industry. On April 12th, the National Development and Reform Commission issued the “Circular on Regulating the Orderly Development of the Coal Chemical Industry”, requiring that the approval of the coke and calcium carbide projects that simply increase production capacity be suspended and the construction of coal with an annual output of 500,000 tons or less be suspended before the relevant national plans are issued. Production of olefins from methanol, annual production of 1 million tons of coal-to-methanol project and annual production of 1 million tons of coal-based dimethyl ether project.

The industry believes that this move will further raise the threshold of coal chemical industry, and will set a higher threshold and a more stringent market environment for small and medium-sized coal chemical companies and later, and it will be a coal chemical enterprise that already has scale, resources and technology advantages. Good.

According to incomplete statistics, at present, the newly added coal used in the construction and approved coal chemical projects in the country has exceeded 100 million tons, and the planned total number of new coal used in the project is still several hundred million tons. Blind construction and excessive development of coal chemical industry not only exacerbates the contradiction between supply and demand of coal, but also directly affects the nation’s total control of energy consumption.

The reason why the NDRC explicitly ordered the suspension of coal chemical projects that did not meet the requirements was due to the overheated investment in domestic coal chemical projects, which led to serious overcapacity.

SMB or exit

At present, there are more than 10 coal gas projects currently under construction and under preliminary work in China, with scales of more than 1600 to 400 million cubic meters per year, but only 4 have been approved to date. Among them, coal-based natural gas projects account for the majority of 2 billion cubic meters and below. According to the NDRC, these projects will be banned.

Zhong Yingzhi, a researcher of China Investment Advisor Chemical Industry Co., Ltd., said in an interview that the notice from the National Development and Reform Commission further improved the access standards for the coal chemical industry in China. The expansion of domestic coke and calcium carbide production capacity will be limited, and it will also inhibit China’s coal production. The blind expansion of olefin projects and coal-to-coal ether projects is a significant positive for coal chemical companies that already have the advantages of scale, resources, and technology in China. “The competitive environment of some small and medium-sized coal chemical companies in China will become more complicated. In the future, some enterprises that do not have the advantages of scale, resources and technology will gradually withdraw from the market,” he said.

Key technologies have not yet been mastered

Chang Zhizhi stated that the active development of coal chemical projects by enterprises is mainly driven by interests. On the one hand, the development prospects of the modern coal chemical industry are relatively optimistic, and the value-added space of related products is relatively large. On the other hand, some enterprises are actively pursuing the layout of coal chemical projects in order to capture the coal resources to obtain more benefits. In addition, each province with resource advantages in order to promote the rapid development of the local economy, but also rush to launch relevant preferential policies to attract powerful companies to build coal chemical projects in the local.

However, Chang Zhizhi also pointed out that the current problems in the development of coal chemical industry, in addition to excess capacity, pressure on energy saving and emission reduction, some key technologies have not yet mastered, and project approval procedures and industry supervision system is still not perfect.

Luxi Chemical Securities representative Li Xueli told reporters that the coal power in the early phase of thermal power was relatively tight, and some coal chemical companies rely purely on coal resources for their projects. This would not only be costly but also unlikely to be profitable.

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