Starting from April 1, the country will reduce the value-added tax in all industries on a large scale. The value-added tax rate for the coal-to-ethylene glycol industry, which was originally subject to a 16% tax rate, will be reduced to 13%, which makes industry insiders very pleased. However, some experts said that tax cuts will not completely rescue coal-based ethylene glycol companies from difficulties. They need to take advantage of policies to speed up technological progress, improve product quality, and not blindly follow trends. A realistic choice for escape.
Since the fourth quarter of 2018, ethylene glycol Prices have plummeted, causing the profits of the coal-based ethylene glycol industry to shrink significantly. Currently, most companies are already losing money.
<span style="font-size: 16px" It is impossible to change the relationship between supply and demand and completely bail out coal-to-ethylene glycol companies," said Hu Dawei, director of the Financial Assets Department of Shaanxi Coal and Chemical New Energy Co., Ltd.
It is understood that the coal-to-ethylene glycol industry is facing excessive growth in production capacity, limited new production capacity in the downstream polyester industry, continued rise in coal prices, low oil prices and the impact of ethane routes and many other challenges.
From the perspective of production capacity growth, in 2018 alone, my country’s new coal (synthetic gas) production of ethylene glycol The production capacity is 2.22 million tons, bringing the total coal-to-ethylene glycol production capacity to 4.66 million tons/year; from 2019 to 2021, 33 domestic coal (synthetic gas)-to-ethylene glycol projects will be completed and put into operation, with an additional production capacity of 9.47 million tons. /Year. By then, the total production capacity of coal-to-ethylene glycol will reach 14.13 million tons/year. Among them, the total production capacity of ethylene glycol projects put into operation in 2019 alone (mostly coal-based ethylene glycol) reached 3.64 million tons/year, a surge of 34.5%. However, few new projects in its downstream polyester industry will be put into production in the next three years.
<span style="font-size: 16px" Facing the challenges of the two ethylene glycol processes of ethane cracking to produce ethylene and naphtha cracking to ethylene, we will also face the lower cost coal-based synthesis gas – formaldehyde/glycolic acid Challenges of new technologies for ethylene glycol production.
A survey shows that after the value-added tax rate was reduced from April 1, the coal-based “>Ethylene glycol Enterprises’ capital occupation and financial costs in raw material procurement, production, sales and other links will be reduced accordingly, and product competitiveness and profitability will be enhanced accordingly. However, the reduction of value-added tax is a reduction of the entire industry chain. Since coal-to-ethylene glycol has not formed a complete upstream and downstream industrial chain, the positive impact of the tax reduction will be limited.
Ethylene glycolA realistic choice for the industry to get out of trouble. Experts such as Jin Yong, academician of the Chinese Academy of Engineering, and Yao Yuangen, researcher at the Fujian Institute of Physics, Chinese Academy of Sciences, have expressed this view.
Jin Yong said that breakthroughs in core technology and large-scale key equipment can effectively improve coal productionEthylene glycolProduct quality, reduce costs and increase profits. For example, Shandong Hualu Hengsheng’s 500,000 tons/year synthesis gas to ethylene glycol unit has a single unit scale that is more than twice that of existing enterprises, requiring less equipment investment and reducing overall energy consumption by more than 10% compared with existing units. In the current situation where most coal-to-ethylene glycol companies are making small profits or even losing money, the company is still able to achieve relatively good profits.
Yao Yuangen said that the decline in international oil prices and the high price of coal in my country have made coal-to-ethylene glycol production more difficult than The cost advantage of oil routes shrinks. However, as the quality of coal-basedethylene glycolproducts improves, the downstream polyester industry’s recognition of it is increasing. In the later stage, as long as companies continue to improve product quality and adopt new technologies, they will significantly reduce In terms of cost, coal-based ethylene glycol is still highly competitive.
He suggested that enterprises should give priority to more stable, efficient and low-cost technologies; give priority to coal and water resources Construction of coal-ethylene glycol-polyester-textile integration in areas with abundant resources and low energy costsoptimizing projects to reduce risks and obtain higher profits.
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