Abundant availability has made ‘coal’ the low cost advantageous feedstock for petrochemical production in China. The share of coal-based petrochemical production in total production has been on the growth trajectory in the country since 2010. It has gradually increased from a mere 3% in 2010 to around 16% in 2018.
Dayanand Kharade, Oil & Gas Analyst at GlobalData, says: “With declining crude oil prices from mid-2014, coal started losing its low cost advantage as feedstock for petrochemical production, which may prompt producers to turn back to dominant feedstock ‘Naphtha’.”
Kharade concludes: “With China working actively to meet its clean energy goals to reduce carbon emission and reducing the usage of coal, the upcoming CTO/MTO projects timeline are likely to be affected. The cost of environmental protection is likely to be one of the key factors for dragging down the competitiveness of CTO projects.”
