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ASIACHEM: China’s CTO/MTO Economic Analysis in 2017Q3

2017-11-02

Up to 2017Q3, China has built 28 sets of CTO/MTO units, with 12.05Mt olefins capacity. (7 sets of no-running MTP units capacity exclude.) There are 10 sets of CTO integrated units, in total 7.05Mt/a olefins capacity.

 

ASIACHEM’s data shows, in 2017Q3, the main CTO projects located in Baotou, Inner Mongolia, Ningdong, Ningxia, Yulin, Shaanxi, the coal prices (5500Kcal) are respectively 450 CNY/t, 560 CNY/t, 480 CNY/t. Estimated as 100% operation rate, tons of polyolefin production costs as follows:

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来源:《中国煤制烯烃年度报告2017》、《中国CTO/MTO季度报告2017

Source: <China Coal to Olefins Annual Report 2017>, <China CTO/MTO Quarterly Report 2017>

 

In 2017Q3, 7 sets of CTO/MTO units had equipment maintenance or stopped running. Once plant operating rate cut down, tons of products allocated to financial expenses and depreciation cost increased. During the quarter, the polyolefin cost of the main CTO plants was about 5900-6300 CNY/t, while the cost of polyolefin in the overhaul period was more than 7000 CNY/t.

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来源:《中国煤制烯烃年度报告2017》、《中国CTO/MTO季度报告2017

Source: <China Coal to Olefins Annual Report 2017>, <China CTO/MTO Quarterly Report 2017>

 

In 2017Q3, East China HDPE average price was at 10146 CNY/t, LLDPE at 9675 CNY/t, LDPE at 10389 CNY/t, PP copolymerization at 8952 CNY/t, PP drawing at 8528 CNY/t. ASIACHEM estimates, the main CTO units tons of products profit was about 1200-1800 CNY/t, while the profits of maintenance period units decreased or loss.

 

Overall, the coal price and the operating rate is the key factor influencing coal to olefin project profitability. Coal to olefins in the total cost of raw coal prices accounted for about 30-35%. Coal cost accounted for 30-35% of CTO projects costs. The price of coal increased 50 CNY/t, CTO increase the cost of about 350 CNY/t. At the same time, the unit operating rate reduced, the financial and depreciation costs of the tons of products are increased, and ultimately affect the profitability of the project.

 

Up to 2017Q3, China has built 28 sets of CTO/MTO units, with 12.05Mt olefins capacity. (7 sets of no-running MTP units capacity exclude.) There are 11 sets of outsourced methanol to olefins units, in total 5Mt/a olefins capacity.

 

ASIACHEM’s data shows that in 2017Q3, Jul/Aug/Sep months East China methanol average price was 2458/2547/2821 CNY/t, methanol prices in the middle of September rose to 2940 CNY/t. Under the price of raw material methanol, the cost of unit olefin in the mainstream MTO unit was about 7000-7500 CNY/t.

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来源:《中国煤制烯烃年度报告2017》、《中国CTO/MTO季度报告2017

Source: <China Coal to Olefins Annual Report 2017>, <China CTO/MTO Quarterly Report 2017>

 

Compared to CTO most of the downstream products for PE and PP, the downstream products of MTO is more abundant. The downstream products of ethylene include ethylene monomer, PE, EG, EO and EVA etc. The downstream products of propylene include propylene monomer, PP, acrylonitrile, butyl alcohol etc. In Q3, the profit of the downstream products of the MTO unit in the coastal area was 780 CNY/t, and the loss of the downstream products of propylene was 200 CNY/t.

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来源:《中国煤制烯烃年度报告2017》、《中国CTO/MTO季度报告2017

Source: <China Coal to Olefins Annual Report 2017>, <China CTO/MTO Quarterly Report 2017>

 

In 2017Q3, raw coal price in Ordos region, China was averaged at CNY500/t (VAT included), Brent Oil at USD52/bbl, East China methanol at CNY2608/t (VAT included), and propane import at CNY3050/t (VAT not included). Under this price, cost of naphtha cracking to olefin and PDH process was lower than that of CTO/MTO.

 

Overall, the price of raw materials and operating rate is key factor affecting the profitability of the project CTO/MTO. In 2017Q3, mainstream CTO units polyolefin products profit was about 1200-1800 CNY/t; and MTO units integrated product average profit was about 300 CNY/t. CTO unit with high load and stable operation maintained good profit level, while the MTO unit is affected by the price of raw materials methanol, parts of units had loss, parts of the configuration of high value-added downstream units still maintained good profit.