This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Coal-to-Olefins Technology In China Could Soon Flood Global Polyethylene Markets

NEW YORK, March 24, 2014 /PRNewswire/ -- If China's development of coal-to-olefins (CTO) technology continues as planned across the next five years, the global polyethylene (PE) market is likely to be saturated with material through 2019, according to the just-released quarterly: " Platts Shale to Polyethylene Report – Global Outlook to 2023."

Polyethylene, also called polythene, is the world's most widely used plastic, primarily used to make films used in packaging and plastic bags. Polyethylenes consume more than half of the world's supply of ethylene, derived from various petrochemical olefins. 

"At Platts, we are tracking more than three dozen coal-to-olefins and methanol-to-olefins projects in China, all of which are likely to come on stream by 2020," said Jim Foster, editorial director of petrochemical analysis at Platts, a leading global information provider of energy, petrochemicals, metals and agriculture information. "Those new plants are expected to add more than 10 million metric tons of ethylene to the Chinese market."

The Platts Shale to Polyethylene Report showed that the amount of ethylene produced from coal-to-olefins in China is expected to match the amount of ethylene produced from new steam cracker projects tied to shale gas developments in North America.

"We hear a lot of talk about how shale gas is a 'game changer' in the petrochemical industry," Foster said. "And it certainly is. But coal-to-olefins has the potential to have an even greater impact than shale gas, if China moves forward as planned."

Report data showed that not only is China adding ethylene production capacity, it is adding more than 14 million metric tons of additional polyethylene capacity between 2014 and 2021, much of which is being fed by the coal-to-olefins-produced ethylene.

The Report, in its look at new ethylene and polyethylene production developments worldwide, made clear that new Asian capacity – most of which is in China – will hit the global markets ahead of the new production planned for North America.  The largest capacity gains in the Americas are projected to occur in 2017 and 2020, when new shale-based production comes on-stream.

"Each of those two years will see increases of little more than two-million metric tons," said Foster, "but in 2015 and 2016 alone, Asian PE capacity could climb more than seven million metric tons."

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Submit an article to us!
SYM TRADE IT LAST %CHG

Markets

DOW 18,070.40 +46.34 0.26%
S&P 500 2,114.49 +6.20 0.29%
NASDAQ 5,016.9290 +11.5380 0.23%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs